Can a Bumper Man franchisee lease property to a competitive business during the term of the franchise agreement?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| q. Non-competition covenants during the term of the franchise | Section 17(a) | You and your principals will not divert any business or customer to a competitor, perform directly or indirectly any act injurious or prejudicial to the goodwill of the Marks and System, and you will not 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. |
| r. Non-competition covenants after the franchise is terminated or expires | Section 17(a) | For the two-year period following termination or expiration of the Franchise Agreement (and, with respect to your principals, for the two year period following the date upon which your principal ceases being a "principal" as defined in the Franchise Agreement), you and your principals will not divert any business or customer to a competitor, do or perform any act injurious to or prejudicial to the goodwill of the Marks and the System, or 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 (i) within the Designated Area defined in your Franchise Agreement; or (ii) at or within 25 miles of any Bumper Business. |
| s. Modification of the agreement | Section 26(c) | Generally, no modifications without your consent, except that we may unilaterally change the scope of the competition covenants, Marks, and Manual. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 33–38)
What This Means (2025 FDD)
According to the 2025 Bumper Man Franchise Disclosure Document, a franchisee is restricted from leasing property to a competitive business during the term of the franchise agreement. The agreement states that the franchisee and their principals cannot 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. This restriction is part of the non-competition covenants during the term of the franchise, as outlined in Section 17(a) of the Franchise Agreement.
This non-compete clause is a fairly standard practice in franchising. It aims to protect the Bumper Man brand and its market position by preventing franchisees from supporting or benefiting from competing businesses. The restriction applies not only to the franchisee but also to their principals, ensuring a comprehensive commitment to the Bumper Man system.
After the franchise is terminated or expires, a similar non-competition covenant applies for a two-year period. During this time, the franchisee and their principals are prohibited from engaging in competitive activities within the Designated Area defined in the Franchise Agreement or within 25 miles of any Bumper Business. This extended restriction further safeguards Bumper Man's interests even after the franchise relationship ends.
However, Bumper Man retains the right to unilaterally change the scope of the competition covenants, Marks, and Manual, as stated in Section 26(c) of the Franchise Agreement. This means that Bumper Man can modify the non-compete terms, potentially impacting the franchisee's future business activities. Prospective franchisees should carefully consider these restrictions and the franchisor's ability to modify them when evaluating the Bumper Man franchise opportunity.