If a Bumper Man franchisee applicant is an individual, what does Bumper Man recommend?
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, while a franchise applicant can be an individual, corporation, partnership, or other legal entity, Bumper Man recommends that individual applicants form a legal business entity to operate as the franchisee. The individual applicant must have sole authority over the Bumper Business's daily operations and hold the majority voting rights, referred to as the "Controlling Interest," within the franchisee entity.
If an individual applicant chooses to follow Bumper Man's recommendation and forms a franchise entity, a transfer agreement will be established to transfer the franchise ownership to the newly formed entity. This transfer is intended for ownership convenience.
Furthermore, the individual will be required to personally guarantee the obligations of the franchise entity. This means that even though the business is operating under a legal entity, the individual remains personally liable for the financial and contractual obligations of the Bumper Man franchise. This is a common practice in franchising, as it provides the franchisor with an additional layer of security and assurance that the franchisee will uphold their commitments.