Does the Bumper Man FDD require disclosure of civil actions alleging fraudulent conversion?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
- The following language is added to the end of Item 3 of the Franchise Disclosure Document:
Except as provided above, the following applies to the franchisor, its predecessor, a person identified in Item 2, or an affiliate offering franchises under the franchisor's principal trademark:
- A. No such party has an administrative, criminal or civil action pending against that person alleging: a felony, a violation of a franchise, antitrust or securities law, fraud, embezzlement, fraudulent conversion, misappropriation of property, unfair or deceptive practices, or comparable civil or misdemeanor allegations.
- B. No such party has pending actions, other than routine litigation incidental to the business, that are significant in the context of the number of franchisees and the size, nature or financial condition of the franchise system or its business operations.
- C. No such party has been convicted of a felony or pleaded nolo contendere to a felony charge or, within the 10-years immediately preceding the application for registration, has been convicted of or pleaded nolo contendere to a misdemeanor charge or has been the subject of a civil action alleging: violation of a franchise, antifraud, or securities law; fraud; embezzlement; fraudulent conversion or misappropriation of property; or unfair or deceptive practices or comparable allegations.
- D. No such party is subject to a currently effective injunctive or restrictive order or decree relating to the franchise, or under a Federal, State, or Canadian franchise, securities, antitrust, trade regulation or trade practice law, resulting from a concluded or pending action or proceeding brought by a public agency; or is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities and Exchange Act of 1934, suspending or expelling such person from membership in such association or exchange; or is subject to a currently effective injunctive or restrictive order relating to any other business activity as a result of an action brought by a public agency or department, including, without limitation, actions affecting a license as a real estate broker or sales agent.
Source: Item 22 — CONTRACTS (FDD page 45)
What This Means (2025 FDD)
Yes, according to Bumper Man's 2025 Franchise Disclosure Document, the franchisor must disclose certain civil actions alleging fraudulent conversion. Specifically, Item 3 of the FDD requires disclosure of pending or past civil actions alleging fraudulent conversion against the franchisor, its predecessors, people identified in Item 2 (which typically includes officers, directors, and key executives), or affiliates offering franchises under the Bumper Man trademark.
The disclosure requirement applies to pending administrative, criminal, or civil actions alleging, among other things, fraud or fraudulent conversion. It also applies to past actions within the last 10 years that resulted in a conviction, a plea of nolo contendere, or a civil action alleging fraud or fraudulent conversion. This disclosure helps prospective franchisees assess the integrity and financial stability of Bumper Man and its leadership.
This information is crucial for potential Bumper Man franchisees as it provides transparency regarding any legal issues involving fraud or fraudulent conversion that Bumper Man or its key personnel may have faced. A history of such actions could indicate potential risks associated with investing in a Bumper Man franchise. Therefore, carefully reviewing Item 3 of the FDD is essential for making an informed decision.