If a Bumper Man franchisee applicant is an individual, what authority must they have?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
A franchise applicant may be an individual, corporation, partnership, or other form of legal entity. However, if a franchisee applicant is an individual, we recommend you form a legal business entity to act as franchisee. Such individual franchisee applicant must have the sole authority to direct the day-to-day operations of the Bumper Business and hold majority voting rights ("Controlling Interest") in the franchisee entity. When you form the franchise entity, you and we will enter into a transfer agreement for the convenience of ownership transferring ownership of the franchise to the franchisee entity and you will be required to personally guaranty the obligations of the franchise entity.
Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 8–11)
What This Means (2025 FDD)
According to the 2025 Bumper Man Franchise Disclosure Document, if a franchise applicant is an individual, they must have the sole authority to direct the day-to-day operations of the Bumper Business. This individual must also hold majority voting rights, referred to as a "Controlling Interest," in the franchisee entity. While Bumper Man allows franchise applicants to be individuals, corporations, partnerships, or other legal entities, they recommend that individual applicants form a legal business entity to act as the franchisee.
If an individual applicant chooses to form a franchise entity, Bumper Man will enter into a transfer agreement to transfer ownership of the franchise to the newly formed entity. In this scenario, the individual is required to personally guarantee the obligations of the franchise entity. This means that the individual remains personally liable for the financial and contractual obligations of the Bumper Man franchise, even though it is operated through a separate legal entity.
This requirement ensures that even if the franchise is operated through a business entity, there is a clear line of responsibility and control vested in a single individual. This individual's personal guarantee provides Bumper Man with additional security, as they can pursue the individual's personal assets if the franchise entity fails to meet its obligations. Prospective franchisees should carefully consider the implications of this personal guarantee and consult with legal and financial advisors before proceeding.