Are the principals of a Bumper Man franchisee required to execute a Guaranty and Undertaking of Obligations?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
- (ii) Franchisee will disclose to Franchisor all Principals holding any Equity Interests in Franchisee. Franchisee will provide Franchisor with such financial information as Franchisor may periodically request from Franchisee and each Principal, including copies of annual financial statements or tax returns.
- (iii) Each Principal will execute and deliver to Franchisor a Guaranty and Undertaking of Obligations in the form attached hereto as Exhibit B. Any spouse or relative of Franchisee who Franchisor has authorized to perform any obligations relating to the Bumper Business will also execute and deliver to Franchisor a Guaranty and Undertaking of Obligations.
Principal hereby unconditionally agrees to be personally bound by, and personally liable for, the breach of each and every provision in the Agreement, both monetary obligations and obligations to take or refrain from taking specific actions, or to engage or refrain from engaging in specific activities.
Principal consents and agrees that it will render any payment or performance required under the Agreement upon demand if Franchisee fails or refuses punctually to do so.
Principal consents and agrees that its liability under this Guaranty will not be contingent or conditioned upon Franchisor pursuing any remedies against Franchisee or any other Person. Principal waives any right it may have to require that Franchisor bring an action against Franchisee or any other Person as a condition of its liability. Principal further waives protest and notice of Franchisee's default or nonperformance of any obligation that is guaranteed by Principal or notice of demand for payment issued by Franchisor, and any and all other notices and legal or equitable defenses to which Principal may be entitled in its capacity as guarantor.
This Guaranty will remain in force notwithstanding the death of the undersigned, and will be binding on the undersigned's personal representatives; and
- (c) this Guaranty will continue and will be enforceable notwithstanding any change in the name or the constitution of Franchisor or Franchisee.
Source: Item 23 — RECEIPTS (FDD pages 45–180)
What This Means (2025 FDD)
According to the 2025 Bumper Man Franchise Disclosure Document, if the franchisee is a business entity, each principal holding equity interests in the franchisee must execute and deliver a Guaranty and Undertaking of Obligations to Bumper Man. This requirement is formalized in a document attached as Exhibit B to the franchise agreement. Furthermore, any spouse or relative of the franchisee who is authorized by Bumper Man to perform obligations related to the Bumper Business must also execute and deliver this Guaranty and Undertaking of Obligations.
This means that principals are personally bound by the agreement. They must consent and agree to render any payment or performance required under the agreement upon demand if the franchisee fails or refuses to do so punctually. The principal's liability under this Guaranty will not depend on Bumper Man pursuing remedies against the franchisee or any other person. The principal also waives any right to require Bumper Man to bring an action against the franchisee as a condition of their liability.
The Guaranty remains in force even after the death of the principal and is binding on their personal representatives. It continues and is enforceable regardless of any changes in the name or structure of either Bumper Man or the franchisee. The principal also agrees to be personally liable for breaches of the agreement, including both monetary obligations and specific actions or inactions. This ensures that Bumper Man has recourse to the personal assets of the principals if the franchisee fails to meet its obligations.
These stipulations are fairly standard in franchising, as they provide an added layer of security for the franchisor. Prospective Bumper Man franchisees should carefully review Exhibit B and understand the full extent of the obligations they are undertaking personally, as these obligations extend beyond the business entity and could impact their personal assets and financial standing.