What constitutes a 'material misrepresentation' by a Bumper Man franchisee that could lead to termination?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
The occurrence of any of the following will adversely and substantially affect the interests of Franchisor and will be deemed an Event of Default constituting just cause for exercising any of the remedies set forth herein:
- (a) Franchisor may terminate this Agreement upon delivery to Franchisee of Notice as a result of the occurrence of any of the following Events of Default and Franchisee's failure to cure such Event of Default within the cure period described below, if any, and absent a cure period, immediately upon Franchisor's Notice to Franchisee:
- (i) Franchisee (or any of its Principals or Affiliates) has made any material misrepresentation or omission in connection with this Agreement;
Source: Item 23 — RECEIPTS (FDD pages 45–180)
What This Means (2025 FDD)
According to Bumper Man's 2025 Franchise Disclosure Document, a franchisee (or any of its Principals or Affiliates) making any material misrepresentation or omission in connection with the Franchise Agreement is an event of default that could lead to termination of the agreement. The FDD specifies that the franchisor may terminate the agreement upon delivery of notice to the franchisee if such an event occurs and is not cured. The document does not define what constitutes a 'material misrepresentation'.
In practical terms, this means that any false or misleading statement made by a prospective Bumper Man franchisee during the application or agreement process could be grounds for termination. This could include misrepresenting financial resources, business experience, or any other information that Bumper Man relies on when deciding to award a franchise. The franchisee has an opportunity to 'cure' the default, but the FDD does not specify the conditions or time frame for such a cure.
Prospective franchisees should be extremely careful to ensure that all information provided to Bumper Man is accurate and complete. Due diligence is essential, and any doubts about the accuracy of information should be clarified with the franchisor. It is also advisable to seek legal counsel to fully understand the implications of this clause and what might be considered a 'material misrepresentation' in the context of the franchise agreement. Franchisees should ask the franchisor for examples of what they would consider a 'material misrepresentation'.