What forms of legal entity can a Bumper Man franchise applicant be?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
A franchise applicant may be an individual, corporation, partnership, or other form of legal entity. However, if a franchisee applicant is an individual, we recommend you form a legal business entity to act as franchisee. Such individual franchisee applicant must have the sole authority to direct the day-to-day operations of the Bumper Business and hold majority voting rights ("Controlling Interest") in the franchisee entity. When you form the franchise entity, you and we will enter into a transfer agreement for the convenience of ownership transferring ownership of the franchise to the franchisee entity and you will be required to personally guaranty the obligations of the franchise entity.
Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 8–11)
What This Means (2025 FDD)
According to Bumper Man's 2025 Franchise Disclosure Document, a franchise applicant can be an individual, corporation, partnership, or other form of legal entity. However, if the applicant is an individual, Bumper Man recommends forming a legal business entity to act as the franchisee.
If an individual applies, they must have the sole authority to direct the day-to-day operations of the Bumper Business and hold majority voting rights in the franchisee entity. This controlling interest ensures that the individual maintains control over the franchise's operations, even if it operates under a business entity.
When a franchisee forms a franchise entity, Bumper Man requires entering into a transfer agreement to transfer ownership of the franchise to the entity. Additionally, the individual is required to personally guarantee the obligations of the franchise entity. This personal guarantee means the individual remains liable for the financial and contractual obligations of the franchise, even though the business entity technically owns the franchise. This is a common practice in franchising to ensure the franchisor has recourse to the individual's assets if the business entity defaults.