Can a Bumper Man franchisee or its principals directly or indirectly divert business to a competitive business during the term of the franchise agreement?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee and its Principals covenant and agree that during the Term, and for a continuous uninterrupted period of two years following its expiration, termination, or an approved Transfer and with respect to a Principal, following the date the Principal ceases to be a Principal under this Agreement, Franchisee and each of its Principals, as applicable, will not, without Franchisor's prior written consent, either directly or indirectly, for itself or themselves, or through, on behalf of, or in conjunction with, any Person or Entity:
- (i) Divert or attempt to divert any actual or prospective business or Customer of the Bumper Business to any Competitive Business, by direct or indirect induc
Source: Item 23 — RECEIPTS (FDD pages 45–180)
What This Means (2025 FDD)
According to Bumper Man's 2025 Franchise Disclosure Document, both the franchisee and its principals are restricted from diverting business to a competitive business during the term of the franchise agreement. Specifically, 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 inducement. This restriction is in place to protect Bumper Man's market share and customer base.
These restrictions extend beyond simply not diverting existing customers. Franchisees and their principals are also prohibited from attempting to attract prospective customers to a competing business. This broad restriction aims to prevent any action that could undermine the Bumper Man franchise.
After the franchise agreement expires, is terminated, or is transferred, or when a principal ceases to be a principal, these restrictions continue for a period of two years. During this time, the non-compete applies within 25 miles of the Designated Area and any other Bumper Man business, unless the franchisor provides written approval otherwise. This ensures that franchisees and their principals cannot immediately leverage their knowledge and experience gained from Bumper Man to benefit a competitor in the same geographic area.