What is meant by 'Controlling Interest' in the context of a Bumper Man franchise?
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 franchisee applicant is an individual, Bumper Man recommends forming a legal business entity to act as the franchisee. In this context, the individual franchisee applicant must have the sole authority to direct the day-to-day operations of the Bumper Business and hold majority voting rights, which Bumper Man defines as "Controlling Interest" in the franchisee entity.
This means that even if the franchisee chooses to operate under a business entity like a corporation or LLC, the individual initially approved for the Bumper Man franchise must retain decision-making power and own more than 50% of the voting rights within that entity. This ensures that the person Bumper Man has vetted and trained maintains control over the franchise's operations.
Bumper Man also requires that when the franchise entity is formed, the franchisee and Bumper Man will enter into a transfer agreement for the convenience of ownership transferring ownership of the franchise to the franchisee entity and the franchisee will be required to personally guaranty the obligations of the franchise entity. This means the individual will still be responsible for the financial and legal obligations of the Bumper Man franchise, even if it operates under a business entity.