Are the non-competition covenants for Bumper Man applicable to both the franchisee and their principals?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| q. Non-competition covenants during the term of the franchise | Section 17(a) | You and your principals will not divert any business or customer to a competitor, perform directly or indirectly any act injurious or prejudicial to the goodwill of the Marks and System, and you will not 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. |
| r. Non-competition covenants after the franchise is terminated or expires | Section 17(a) | For the two-year period following termination or expiration of the Franchise Agreement (and, with respect to your principals, for the two year period following the date upon which your principal ceases being a "principal" as defined in the Franchise Agreement), you and your principals will not divert any business or customer to a competitor, do or perform any act injurious to or prejudicial to the goodwill of the Marks and the System, or 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 (i) within the Designated Area defined in your Franchise Agreement; or (ii) at or within 25 miles of any Bumper Business. |
| s. Modification of the agreement | Section 26(c) | Generally, no modifications without your consent, except that we may unilaterally change the scope of the competition covenants, Marks, and Manual. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 33–38)
What This Means (2025 FDD)
According to Bumper Man's 2025 Franchise Disclosure Document, the non-competition covenants apply to both the franchisee and their principals, both during and after the franchise term. During the term of the franchise agreement, both the franchisee and their principals are prohibited from diverting business to competitors, performing any actions detrimental to the goodwill of Bumper Man's marks and system, or having any direct or indirect interest in a competitive business.
Following the termination or expiration of the franchise agreement, these restrictions continue for a period of two years. This two-year restriction applies to the franchisee and, with respect to the principals, for two years after they cease to be a principal as defined in the Franchise Agreement. During this period, they are prohibited from engaging in similar competitive activities within the designated area specified in the Franchise Agreement or within 25 miles of any Bumper Man business.
Bumper Man also retains the right to unilaterally change the scope of the competition covenants, Marks, and Manual, with some limitations. This means that Bumper Man can modify the non-compete terms, potentially making them more restrictive, although the document mentions that this is generally subject to the franchisee's consent. Prospective franchisees should carefully consider these non-competition terms and how they might impact their future business opportunities, as well as those of their principals.