What is the duration of the non-compete covenant for a Bumper Man franchisee after the expiration or termination of the franchise agreement?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
Following the expiration of the Term, termination of this Agreement, or an approved Transfer of this Agreement and with respect to a Principal, following the date the Principal ceases to be a Principal under this Agreement, this restriction will apply to any Competitive Business located within 25 miles of the Designated Area and any other Bumper Man business, except as otherwise approved in writing by Franchisor.
If any part of these restrictions is found to be unreasonable in time or distance, each month of time or mile of distance may be deemed a separate unit so that the time or distance may be reduced by appropriate order of the court to that deemed reasonable. If, at any time during the two-year period following the expiration, termination, or approved Transfer of this Agreement or the date any Principal ceases to be a Principal under this Agreement, Franchisee or any of its Principals fails to comply with its obligations under this Section 17(a), that period of non-compliance will not be credited toward satisfaction of the two-year period.
Source: Item 23 — RECEIPTS (FDD pages 45–180)
What This Means (2025 FDD)
According to Bumper Man's 2025 Franchise Disclosure Document, franchisees are subject to a restrictive covenant that limits their ability to engage in competitive business activities after the franchise agreement expires or is terminated. Specifically, for a period of two years following the expiration, termination, or approved transfer of the agreement, the franchisee is restricted from owning, maintaining, operating, or being involved with any Competitive Business within 25 miles of the Designated Area or any other Bumper Man business. This restriction is subject to written approval by Bumper Man.
This post-term non-compete agreement prevents a former Bumper Man franchisee from leveraging the knowledge and experience gained during their franchise term to unfairly compete with the franchisor or other franchisees in the system. The geographic scope of 25 miles is designed to protect existing Bumper Man locations from direct competition by a former franchisee who might try to capitalize on established customer relationships or brand recognition.
It's important to note that if a franchisee fails to comply with these obligations at any time during the two-year period, the period of non-compliance will not be credited toward fulfilling the two-year requirement. This means that any breach of the non-compete agreement effectively extends the duration of the restriction. Franchisees should carefully consider these limitations and seek legal counsel to fully understand the implications of the non-compete covenant before entering into a franchise agreement with Bumper Man.
Furthermore, the FDD specifies that if any part of these restrictions is found to be unreasonable in time or distance, the court may reduce the time or distance to what is deemed reasonable. This clause provides a degree of flexibility and ensures that the non-compete agreement is enforceable under applicable laws, which can vary by jurisdiction.