Does the Bumper Man non-compete agreement prevent a franchisee from being employed by a competitive business during the term and the two-year period after?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) Non-Compete. Franchisee and its Principals covenant and agree that during the Term, and for a continuous uninterrupted period of two years following its expiration, termination, or an approved Transfer and with respect to a Principal, following the date the Principal ceases to be a Principal under this Agreement, Franchisee and each of its Principals, as applicable, will not, without Franchisor's prior written consent, either directly or indirectly, for itself or themselves, or through, on behalf of, or in conjunction with, any Person or Entity:
- (i) Divert or attempt to divert any actual or prospective business or Customer of the Bumper Business to any Competitive Business, by direct or indirect inducement or otherwise.
- (ii) Do or perform, directly or indirectly, any other act injurious to or prejudicial to the goodwill associated with the Marks and the System, provided, however, that nothing in this Section 17 or elsewhere in this Agreement restricts or is intended to restrict Franchisee's communications with any state or federal law regulator or enforcement authority about potential violations of law.
- (iii) Own, maintain, operate, be employed by, engage in, franchise, lease property to, advise, help, make loans to, or have any interest in, either directly or indirectly, any Competitive Business.
During the Term, this restriction applies to any Competitive Business located within the United States. Following the expiration of the Term, termination of this Agreement, or an approved Transfer of this Agreement and with respect to a Principal, following the date the Principal ceases to be a Principal under this Agreement, this restriction will apply to any Competitive Business located within 25 miles of the Designated Area and any other Bumper Man business, except as otherwise approved in writing by Franchisor.
If any part of these restrictions is found to be unreasonable in time or distance, each month of time or mile of distance may be deemed a separate unit so that the time or distance may be reduced by appropriate order of the court to that deemed reasonable.
Source: Item 23 — RECEIPTS (FDD pages 45–180)
What This Means (2025 FDD)
According to Bumper Man's 2025 Franchise Disclosure Document, the non-compete agreement restricts a franchisee and their principals from being employed by a competitive business during the term of the agreement and for two years after. Specifically, during the franchise term, this restriction applies to any competitive business located within the United States.
Following the expiration, termination, or approved transfer of the agreement, the restriction applies to any competitive business located within 25 miles of the designated area and any other Bumper Man business. This post-term restriction also applies to a principal for two years after they cease to be a principal under the agreement.
The agreement specifies that franchisees and principals cannot own, maintain, operate, be employed by, engage in, franchise, lease property to, advise, help, make loans to, or have any interest in any competitive business. If any part of these restrictions is found to be unreasonable in time or distance, the agreement allows for the time or distance to be reduced by a court order to what is deemed reasonable.