If the Bumper Man franchisee is a limited liability company, what does the term 'you' refer to?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
The term "you" means the person buying the franchise, the franchisee. If the franchisee is a general partnership (or if we allow you to assign your rights as franchisee to a general partnership), the term "you" refers to all partners. If the franchisee is a corporation, limited liability company or other business entity (or if we allow you to assign your rights as franchisee to a corporation, limited liability company or other business entity), the term "you" refers to the franchisee and the term "principals" refers to any individual or entity with a controlling ownership in the franchisee (including shareholders of a corporation, members of a limited liability company, general and limited partners of a limited partnership, etc.).
Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 8–11)
What This Means (2025 FDD)
According to Bumper Man's 2025 Franchise Disclosure Document, the term 'you' has a specific meaning when the franchisee is a limited liability company. In this case, 'you' refers to the franchisee itself, meaning the limited liability company that is buying the Bumper Man franchise. Additionally, the term 'principals' refers to any individual or entity with a controlling ownership in the franchisee, including members of the limited liability company. This distinction is important for understanding the legal obligations and responsibilities outlined in the franchise agreement.
This definition clarifies who is bound by the terms of the franchise agreement. While the limited liability company is the franchisee, the individuals or entities with controlling ownership are also considered 'principals' and may have certain obligations or liabilities. This is a common practice in franchising to ensure that those who control the franchisee entity are also accountable to the franchisor.
Prospective Bumper Man franchisees should carefully review the franchise agreement and related documents to fully understand the implications of this definition, especially if they plan to operate the franchise through a limited liability company. Understanding the roles and responsibilities of both the franchisee entity and its principals is crucial for a successful and compliant franchise operation.