Is a Bumper Man franchisee allowed to divert business from the Bumper Man franchise to a competitive business, either directly or indirectly?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
For so long as you are Franchisee's Principal under the Franchise Agreement and for a period of two years from the date you cease to be Franchisee's Principal, you will not, either directly or indirectly, individually or through, on behalf of, or in conjunction with any other person:
- (i) Own, maintain, operate, be employed by, engage in, franchise, lease property to, advise, help, make loans to, or have any interest in, either directly or indirectly, any Competitive Business;
- (ii) Divert or attempt to divert any actual or prospective business or customer of the Bumper Business to any Competitive Business, by direct or indirect inducement or otherwise; or
- (iii) Perform, directly, any or indirectly, any other act injurious to or prejudicial to the goodwill associated with the Marks and the System
The above covenants apply exclusively in the United States of America during the time that you serve as Principal for the Bumper Business and within 25 miles of any then-existing Bumper Man business during the two-year period following the date you cease to be the Principal of the Bumper Business.
Source: Item 23 — RECEIPTS (FDD pages 45–180)
What This Means (2025 FDD)
According to the 2025 Bumper Man FDD, a franchisee is restricted from diverting business to a competitive business, either directly or indirectly. During the term of the franchise agreement, this restriction applies to any competitive business located within the United States.
Specifically, the FDD states that for as long as someone is a Principal under the Franchise Agreement, and for two years after ceasing to be a Principal, they cannot divert or attempt to divert any actual or prospective business or customer of the Bumper Business to any Competitive Business, whether through direct or indirect means. This obligation extends to not performing any action that could be injurious or prejudicial to the goodwill associated with the Bumper Man Marks and System.
These covenants are applicable throughout the United States while the individual serves as a Principal for the Bumper Business. Following the period of being a Principal, the restrictions apply within a 25-mile radius of any existing Bumper Man business for a duration of two years. This ensures that former Principals do not leverage their knowledge or relationships gained during their time with Bumper Man to unfairly compete against the franchise.
These restrictions are typical in franchising to protect the brand and prevent franchisees or their principals from using the franchisor's confidential information and business model to benefit a competing business. Prospective franchisees should carefully consider these limitations and how they might impact their future business endeavors after leaving the Bumper Man system.