How are the principals bound by the obligations under the Bumper Man Franchise Agreement?

According to the 2025 Bumper Man Franchise Disclosure Document, the principals are bound to the obligations under the Franchise Agreement by signing the Guaranty and Undertaking of Principal's Obligations, which is attached to the Franchise Agreement as Exhibit B. This means that the principals are personally guaranteeing the obligations of the franchisee entity. If the franchisee is married, their spouse must also sign the Guaranty and Undertaking of Principal's Obligations, regardless of whether they have any interest in the franchisee entity.

This requirement ensures that Bumper Man has recourse to the personal assets of the principals if the franchisee entity fails to meet its obligations under the Franchise Agreement. This is a common practice in franchising, as it provides the franchisor with additional security and encourages the principals to actively manage the franchise business. The obligations extend to all shareholders, officers, directors, partners, members, and all managers and other personnel that have access to Bumper Man's Confidential Information, who must sign non-disclosure agreements.

Principals are also subject to certain restrictive covenants, meaning that for as long as they are the Franchisee's Principal and for two years after, they cannot engage in any competitive business within the United States of America or within 25 miles of any then-existing Bumper Man business. This prevents principals from using their knowledge and experience gained from the Bumper Man franchise to compete with the system. Principals also agree to indemnify Bumper Man against any losses or expenses arising from the operation of the Bumper Business or any breach of the Franchise Agreement.

By signing the Guaranty, the principal acknowledges that their execution is a condition for Bumper Man to grant the franchise rights and that Bumper Man would not have granted such rights without the Guaranty. The Guaranty remains in force even after the principal's death and is binding on their personal representatives. It also continues to be enforceable despite any changes in the name or constitution of Bumper Man or the franchisee. This ensures the franchisor's protection and the continuity of the agreement.