What representation does each party make to the other regarding their evaluation of the Bumper Man business?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
10. REPRESENTATIONS, WARRANTIES, AND COVENANTS.
(a) Business Entity Franchisee.
- (i) Franchisee warrants that it is duly organized or formed and validly existing in good standing under the laws of the jurisdiction of its incorporation or formation; it has the necessary consents, approvals, licenses and/or permits to carry out the business activities contemplated by this Agreement; it will furnish such other information about its organization or formation as Franchisor may reasonably request to confirm the same; and the execution and delivery of this Agreement has been duly authorized by it.
- (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.
- (b) Ideas and Concepts. From time to time in connection with the operation of the Bumper Business, Franchisee may create or develop Ideas and Concepts that Franchisee believes will improve the System or the Bumper Man businesses. Franchisee will promptly disclose such Ideas and Concepts to Franchisor and will not implement such Ideas and Concepts without the prior written approval of Franchisor. Franchisor may elect to use or adopt such Ideas and Concepts if Franchisor determines that such adoption or use will benefit the System. If Franchisor uses or adopts any of such Ideas and Concepts, they will be deemed to be part of the System. Franchisee will be recognized as Franchisor determines appropriate for such Ideas and Concepts. All Ideas
Source: Item 23 — RECEIPTS (FDD pages 45–180)
What This Means (2025 FDD)
According to the 2025 Bumper Man Franchise Disclosure Document, the franchisee makes several representations and warranties to Bumper Man regarding their business operations and legal standing. Specifically, if the franchisee is a business entity, it warrants that it is properly organized and in good standing under the laws of its jurisdiction. The franchisee also confirms that it possesses all necessary consents, approvals, licenses, and permits required to conduct the business activities outlined in the Franchise Agreement. Additionally, the franchisee commits to providing any further information about its organization that Bumper Man may reasonably request to verify this status. The franchisee also confirms that the execution and delivery of the Franchise Agreement has been duly authorized. These representations ensure that the franchisee is legally capable and authorized to enter into and fulfill the obligations of the franchise agreement.
Furthermore, the franchisee is obligated to disclose all individuals holding equity interests in the franchise to Bumper Man. The franchisee must also provide Bumper Man with financial information as requested, including annual financial statements or tax returns, from both the franchisee and its principals. To reinforce these obligations, each principal is required to execute a Guaranty and Undertaking of Obligations, ensuring their personal commitment to the franchisee's performance under the agreement. Similarly, any spouse or relative authorized to perform obligations related to the Bumper Man business must also provide a Guaranty and Undertaking of Obligations.
In addition to these formal representations, the Franchise Agreement also addresses the handling of ideas and concepts developed by the franchisee. If a franchisee creates or develops ideas to improve the Bumper Man system, they must promptly disclose these to Bumper Man and cannot implement them without prior written approval. Bumper Man has the option to use or adopt these ideas if they benefit the system, and if adopted, the franchisee will be recognized as Bumper Man deems appropriate. This clause ensures that any innovations developed within the franchise network can be shared and potentially integrated into the broader Bumper Man system, while also protecting Bumper Man's control over its intellectual property and operational standards.