Is a Bumper Man franchisee required to disclose all principals holding equity interests in the franchisee?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
- (ii) Franchisee will disclose to Franchisor all Principals holding any Equity Interests in Franchisee. Franchisee will provide Franchisor with such financial information as Franchisor may periodically request from Franchisee and each Principal, including copies of annual financial statements or tax returns.
- (iii) Each Principal will execute and deliver to Franchisor a Guaranty and Undertaking of Obligations in the form attached hereto as Exhibit B. Any spouse or relative of Franchisee who Franchisor has authorized to perform any obligations relating to the Bumper Business will also execute and deliver to Franchisor a Guaranty and Undertaking of Obligations.
Source: Item 23 — RECEIPTS (FDD pages 45–180)
What This Means (2025 FDD)
According to Bumper Man's 2025 Franchise Disclosure Document, a franchisee is required to disclose all principals holding equity interests in the franchisee. Specifically, the franchisee must provide this information to Bumper Man. Additionally, the franchisee must furnish any other information about its organization or formation that Bumper Man may reasonably request to confirm the same.
This requirement ensures that Bumper Man knows who the principals are in each franchise location. This allows Bumper Man to assess the qualifications and financial stability of those individuals. It also allows Bumper Man to maintain accurate records of ownership and control within its franchise system.
Furthermore, each principal is required to execute and deliver a Guaranty and Undertaking of Obligations to Bumper Man. This legally binds the principal to the obligations of the franchisee, providing Bumper Man with additional security and recourse in case of default. Any spouse or relative of the franchisee who Bumper Man has authorized to perform any obligations relating to the Bumper Business will also execute and deliver to Bumper Man a Guaranty and Undertaking of Obligations.