Can a Bumper Man franchisee request reinstatement of the agreement after bankruptcy discharge, and what are the conditions?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
This Agreement will automatically terminate upon any of the following: if any bankruptcy proceeding is commenced by or against Franchisee (or any Affiliate or Principal), the Franchisee makes an assignment for the benefit of creditors or admits in writing its insolvency or inability to pay its debts generally as they become due; Franchisee consents to the appointment of a receiver, trustee or liquidator of all or the substantial part of its property; the Bumper Business or Operating Assets is attached, seized, subjected to a writ or distress warrant or levied upon, unless such attachment, seizure, writ, warrant or levy is vacated within 30 days after Notice from Franchisor; or any order appointing a receiver, trustee or liquidator of Franchisee or the Bumper Business is not vacated within 30 days following the entry of such order. Without limiting the foregoing, Franchisee may request that Franchisor reinstate this Agreement following the entry of an order of bankruptcy discharge from a court of competent jurisdiction, which Franchisor may grant or deny at its sole option and, if granted, Franchisor may require Franchisee to sign Franchisor's then-current form of franchise agreement in lieu of reinstatement of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 45–180)
What This Means (2025 FDD)
According to the 2025 Bumper Man Franchise Disclosure Document, the franchise agreement automatically terminates if a franchisee files for bankruptcy. However, the franchisee has the option to request reinstatement of the agreement from Bumper Man following the entry of an order of bankruptcy discharge from a court.
Bumper Man has the sole discretion to either grant or deny the reinstatement request. If Bumper Man approves the request, they may require the franchisee to sign the then-current form of the franchise agreement. This means that the franchisee might have to agree to new terms and conditions as part of the reinstatement process.
This clause provides some flexibility for franchisees who have experienced financial difficulties leading to bankruptcy. However, it's important to note that reinstatement is not guaranteed and is subject to Bumper Man's approval. A prospective franchisee should consider the potential implications of this clause and discuss with Bumper Man the factors that would be considered in evaluating a reinstatement request.