What happens to the Bumper Man agreement if a bankruptcy proceeding is commenced by or against the franchisee?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
- (d) Termination for Insolvency. 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 Bumper Man's 2025 Franchise Disclosure Document, the franchise agreement will automatically terminate if a bankruptcy proceeding is commenced by or against the franchisee, an affiliate, or a principal. This also applies if the franchisee makes an assignment for the benefit of creditors or admits in writing their insolvency or inability to pay debts as they become due. The agreement also terminates automatically if the franchisee consents to the appointment of a receiver, trustee, or liquidator for their property.
Additionally, the Bumper Man agreement will terminate if the Bumper Business assets are attached, seized, subjected to a writ or distress warrant, or levied upon, unless such actions are vacated within 30 days after notice from Bumper Man. Similarly, the agreement terminates if any order appointing a receiver, trustee, or liquidator of the franchisee or the Bumper Business is not vacated within 30 days following the entry of such order.
However, the franchisee has the option to request reinstatement of the agreement following an order of bankruptcy discharge from a court. Bumper Man has the sole discretion to grant or deny this request. If reinstatement is granted, Bumper Man may require the franchisee to sign the then-current form of the franchise agreement.