Can a Bumper Man franchisee advise a competitive business during the term of the franchise agreement?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
| i. Your obligations on termination/non-renewal | Section 19 | Obligations include ceasing operation of your Bumper Business; payment of all amounts owed to us; discontinuing the use of all Marks; ceasing use of the System and our confidential information (including without limitation the Manual) and returning copies of all such confidential information to us; assignment or cancellation of telephone numbers, domain | | | | Business without our prior written consent; you | | | | or your principals or affiliates being held liable | | | | or convicted of a felony, indictable offense or | | | | other unlawful act or you or your principals or | | | | affiliates engaging in any dishonest or unethical | | | | conduct or act that may materially or adversely | | | | affect the brand, System or goodwill associated | | | | with the Marks; any unauthorized use or misuse | | | | of the Marks; any unauthorized transfer under | | | | Section 16 by you or any of your principals or | | | | affiliates; any unauthorized disclosure or use of | | | | our confidential information (including without | | | | limitation the Manual); any failure by you, your | | | | principals or your operator to comply with the | | | | representations, warranties and covenants set | | | | forth in the Franchise Agreement; termination by | | | | us or our affiliates of any other agreement with | | | | you or your affiliates; failure to pay any taxes | | | | applicable to the Bumper Business and its | | | | operations; failure to comply with applicable | | | | law; loss or revocation of any license or permit | | | | required to operate the Bumper Business; if, on | | | | three or more occasions in any 12-month period, | | | | you fail to submit when due reports or other | | | | information | | | | required | | | | under | | | | the | | | | Franchise | | | | Agreement, fail to pay when due any amounts | | | | due to us or our affiliates or fail to materially | | | | comply | | | | with | | | | the | | | | Franchise | | | | Agreement, | | | | regardless | | | | of | | | | whether | | | | you | | | | corrected | | | | such | | | | failures; less than 35% of your Gross Sales | | | | during each month in any consecutive 2-month | | | | period is generated from the repair of metal | | | | bumpers; and you or a principal refuses to take a | | | | drug test we request (if applicable law permits us | | | | to request that you or your principal take a drug | | | | test) or fail any drug test so taken |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 33–38)
What This Means (2025 FDD)
Based on the 2025 Bumper Man Franchise Disclosure Document, the excerpts provided do not explicitly state whether a franchisee is prohibited from advising a competitive business during the term of the franchise agreement. However, Item 17 addresses the franchisee's obligations upon termination or non-renewal, which include ceasing operation of the Bumper Man business and discontinuing the use of the Bumper Man system and confidential information. This suggests there are restrictions on a franchisee's activities related to competitive businesses, at least after the franchise agreement ends.
Additionally, the table in Item 17 outlines various causes for termination of the franchise agreement, such as unauthorized disclosure or use of confidential information. While not directly addressing advising a competitor, this clause indicates that actions harmful to the Bumper Man system and brand are prohibited. It is important to note that the agreement also specifies adherence to representations, warranties, and covenants set forth in the Franchise Agreement, which may contain further restrictions.
To fully understand the scope of restrictions on a franchisee's ability to advise a competitive business, a prospective franchisee should carefully review the entire Franchise Agreement, specifically sections related to confidentiality, non-compete clauses, and franchisee obligations. It would be prudent to seek clarification from the franchisor regarding any limitations on providing advice or services to other businesses in the automotive repair industry during the franchise term. Understanding these limitations is crucial for making an informed decision about investing in a Bumper Man franchise.