What is a Bumper Man franchisee's obligation regarding maintaining trade accounts with suppliers?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee will maintain its trade accounts in a current status and will seek to resolve any disputes with such suppliers promptly. If Franchisee fails to maintain such trade accounts on a current status, to timely pay any amounts owing to any other third parties providing services, Franchisor may, but is not required to, pay any such amounts and/or perform such obligations on Franchisee's behalf. If Franchisor elects to pay any such amounts, then Franchisee must promptly reimburse Franchisor, upon receipt of Franchisor's invoice, for such amounts and its administrative services in doing so. Franchisor may also set off the amount of any such reimbursement against any payments due to Franchisee, at its sole option.
Source: Item 23 — RECEIPTS (FDD pages 45–180)
What This Means (2025 FDD)
According to Bumper Man's 2025 Franchise Disclosure Document, franchisees are required to maintain their trade accounts with suppliers in a current status and promptly resolve any disputes with these suppliers. This means a franchisee must ensure timely payments to all suppliers providing services to their Bumper Man business.
If a franchisee fails to keep these accounts current or pay third parties on time, Bumper Man has the option, but not the obligation, to step in and make those payments or fulfill those obligations on the franchisee's behalf. Should Bumper Man choose to do so, the franchisee is then required to promptly reimburse Bumper Man for the payments made, along with an additional charge for administrative services. Bumper Man also has the option to offset these costs against any payments owed to the franchisee.
This policy ensures that suppliers are paid promptly, maintaining good relationships and uninterrupted service. For a prospective franchisee, this highlights the importance of managing finances carefully and maintaining open communication with both suppliers and the franchisor to avoid potential disruptions and additional costs. Failing to manage trade accounts properly could lead to Bumper Man intervening and charging administrative fees, impacting the franchisee's profitability.