What constitutes a default under the Bumper Man Franchise Agreement regarding payment obligations?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
rument you execute.
New franchise operators who purchase a new Bumper Man franchise and who meet our current credit criteria may pay us half of the initial franchisee fee upon the execution of the Franchise Agreement and pay the remaining half (up to $25,000) in 120 equal semi-monthly installments during a five-year term at an interest rate of 10% per annum, secured by your right, title and interest in the Franchise Agreement. Default of your payment obligations under the note constitutes a default under the Franchise Agreement for which we may terminate the Franchise Agreement if you fail to cure your default of your payment obligat
Source: Item 10 — FINANCING (FDD pages 21–22)
What This Means (2025 FDD)
According to Bumper Man's 2025 Franchise Disclosure Document, a default in payment obligations under the financing note constitutes a default under the Franchise Agreement. This means that if a new Bumper Man franchisee, who has met the credit criteria and financed a portion of the initial franchise fee, fails to make the required payments, it is considered a breach of the Franchise Agreement itself.
Specifically, Bumper Man may finance up to $25,000 of the initial franchise fee for qualified new franchise operators. This amount is payable in 120 equal semi-monthly installments over a five-year term, with an annual interest rate of 10%. The franchisee's rights and interests in the Franchise Agreement secure this financing.
The consequence of defaulting on these payments is significant: Bumper Man has the right to terminate the Franchise Agreement if the franchisee fails to correct the payment default. This highlights the importance of carefully assessing one's financial capabilities and ensuring the ability to meet the payment schedule before entering into a Bumper Man franchise agreement with financing. Franchisees should be aware that their entire franchise can be at risk if they cannot keep up with these payments.