What does 'Control,' 'Controlling,' or 'Controlling Interest' mean in the context of a Bumper Man franchise agreement?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
(a) "Affiliate" means, with respect to a named Person, any Person that is controlled by, Controlling or under common Control with the named Person.
Business, the Operating Assets or any Equity Interest, directly or indirectly, in Franchisee to any Person or any other transaction that would, alone or together with other previous, simultaneous or proposed Transfer, have the effect of transferring Control of Franchisee, this Agreement, or substantially all of the assets of the business operated pursuant to this Agreement. Any transfer of an Equity Interest in Franchisee or the ownership, possession, or Control of the Bumper Business may be made only in conjunction with a Transfer of this Agreement.
- (yy) "Operating Principal" means a natural person who: (i) owns directly or indirectly at least 51% Equity Interest in Franchisee and has the authority to direct the day-to-day operations of the Franchisee; (ii) has satisfactorily completed Franchisor's Initial Training program at Franchisee's expense; (iii) will thereafter devote full time and best efforts to the operation of the Bumper Business and have the authority and responsibility for the day-to-day management and operation of the Bumper Business and supervision of the Personnel; and (iv) serves as a primary point of contact on behalf of the Franchisee in communications with the Franchisor. The initial Operating Principal is identified in the Summary Page.
- (ccc) "Permanently Disabled" means being subject to any physical, emotional or mental injury, illness or incapacity that prevents Franchisee or any Principal holding a Controlling Interest in Franchisee from performing his or her obligations under this Agreement or any other agreement related hereto for at least 90 consecutive days, and from which recovery is unlikely within 90 days from the date such individual is determined to be Permanently Disabled. If the Parties hereto disagree as to whether a Person is "Permanently Disabled," the determination will be made by a licensed practicing physician, selected by Franchisor, upon examination of the Person, or, if the Person refuses to submit to an examination, then for purposes of Section 16(f), the Person will automatically be considered Permanently Disabled as of the date of refusal.
Source: Item 23 — RECEIPTS (FDD pages 45–180)
What This Means (2025 FDD)
According to the 2025 Bumper Man Franchise Disclosure Document, the term 'Affiliate' is defined in relation to 'Control'. Specifically, an 'Affiliate' is any person controlled by, controlling, or under common control with another named person. This definition is important because it establishes how Bumper Man views relationships between different entities associated with the franchisee.
Furthermore, the FDD states that a transfer of the franchisee's business, assets, or equity interest that would effectively transfer control of the franchisee, the agreement, or substantially all of the business's assets is considered a transfer requiring franchisor approval. This means Bumper Man retains the right to approve any change in ownership or management that could alter the operation of the franchise. This provision aims to ensure that any new controlling party meets Bumper Man's standards and is capable of upholding the franchise agreement.
The FDD also defines 'Operating Principal' as someone who owns at least 51% equity interest in the franchisee and has the authority to direct the day-to-day operations. This individual must complete Bumper Man's initial training program and devote full time and effort to the business. The Operating Principal also serves as the primary contact between the franchisee and Bumper Man. This definition clarifies who Bumper Man considers to be in control of the franchise's daily activities and ensures that this person is adequately trained and committed to the business. If a principal holding a controlling interest becomes permanently disabled, it may affect the franchise agreement.