What constitutes a material breach of the Bumper Man franchise agreement regarding payments?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
- (xi) Franchisee fails to pay any Continuing Service Fees or other amounts due hereunder to Franchisor within five days after Notice of nonpayment is delivered to Franchisee, or if Franchisee or its Affiliate fails to pay any amounts due to Franchisor under any promissory note or other written instrument and fails to cure such nonpayment within the time period prescribed therein;
- (xii) Franchisee under-states Gross Sales or fails to accurately report Gross Sales or its performance of any Designated Services, and does not correct such failure within three days after Notice of such failure is delivered to Franchisee, including without limitation payment of the Non-Reported Designated Services Fee for such failure to report performance of Designated Services;
- (xiii) Franchisee fails to pay when due any income, withholding, service, sales or any other applicable taxes due on the Bumper Business' operations, unless it is in good faith contesting its liability for such taxes and has effectively stayed the enforcement of liability for such taxes.
Source: Item 23 — RECEIPTS (FDD pages 45–180)
What This Means (2025 FDD)
According to the 2025 Bumper Man Franchise Disclosure Document, a franchisee can be in material breach of the franchise agreement for failing to make required payments. Specifically, the franchise agreement states that failure to pay Continuing Service Fees or other amounts due to Bumper Man within five days after receiving notice of nonpayment constitutes a material breach. This also applies if the franchisee or its affiliate fails to pay amounts due under any promissory note or written instrument and does not correct the nonpayment within the time period specified in the note or instrument.
Another payment-related breach occurs if a Bumper Man franchisee understates gross sales or inaccurately reports gross sales or performance of designated services. In this case, the franchisee has three days after receiving notice to correct the failure, including paying any Non-Reported Designated Services Fee.
Finally, a material breach occurs if the franchisee fails to pay any income, withholding, service, sales, or other applicable taxes related to the Bumper Business operations when due. However, this does not apply if the franchisee is contesting the tax liability in good faith and has effectively suspended the enforcement of the tax liability. Therefore, it is critical for a prospective Bumper Man franchisee to understand all payment obligations and ensure timely and accurate payments to avoid potential termination of the franchise agreement.