Does the Bumper Man franchisee waive any claims related to the franchisor's recapitalization?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
(vii) Franchisee (and its Principal(s) if Franchisee is an Entity) and Franchisor have executed a general release, in a form satisfactory to Franchisor, releasing Franchisor Indemnitees from any and all claims arising out of the operation of the Bumper Business, excluding claims related to the operation of the Bumper Business by Franchisee or any Principal which have not been expressly assumed by the transferee and its owners and those claims which cannot be released under Applicable Law.
(viii) Franchisee and each Principal must have complied with any other conditions that Franchisor reasonably requires from time to time as part of its transfer policies, provided that such conditions will not be more stringent than any conditions otherwise imposed on new franchisees signing the then-current franchise agreement.
(ix) Franchisee acknowledges that transferee will remit a portion of the purchase price, as determined by Franchisor (but not to exceed 10% of the purchase price of the Bumper Business), to be held by Franchisor in a noninterest bearing account until Franchisee has satisfied all conditions for Transfer set forth in this Agreement and the Manual, including without limitation, transitioning each of Franchisee's Customer accounts to transferee following the effective date of the Transfer. Franchisor may setoff from such portion of the purchase price withheld by Franchisor any amounts owed by Franchisee to Franchisor pursuant to Section 16(d)(i).
Source: Item 23 — RECEIPTS (FDD pages 45–180)
What This Means (2025 FDD)
According to the 2025 Bumper Man FDD, the franchisee is not required to waive claims related to the franchisor's recapitalization in the standard franchise agreement. However, in the event of a transfer of the franchise, the franchisee must execute a general release, satisfactory to Bumper Man, releasing the franchisor from claims arising out of the Bumper Business's operation. This excludes claims that the transferee has not expressly assumed and those claims that cannot be released under applicable law.
This means that while franchisees do not automatically waive all future claims, a significant release of claims is required during a transfer. The franchisor has considerable discretion regarding the form and content of this release. The franchisee must comply with conditions that Bumper Man reasonably requires as part of its transfer policies, provided these conditions are not more stringent than those imposed on new franchisees.
It is important for a prospective Bumper Man franchisee to understand the scope of the release they will be required to sign upon transfer. They should seek legal counsel to review the release form and ensure they understand what claims they are waiving. Franchisees should also be aware that Bumper Man can withhold up to 10% of the purchase price of the Bumper Business to ensure the franchisee satisfies all transfer conditions.