Does Bumper Man require a Guaranty and Undertaking of Principal's Obligations agreement?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
- (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 further acknowledges and agrees as follows:
- (a) it has read the terms and conditions of the Agreement and acknowledges that the execution of this Guaranty is in partial consideration for, and a condition to Franchisor's execution of the Agreement, and Franchisor would not have granted such rights without the execution of this Guaranty by each of the undersigned
- (b) 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.
For so long as you are Franchisee's Principal under the Franchise Agreement and for a period of two years from the date you cease to be Franchisee's Principal, you will not, either directly or indirectly, individually or through, on behalf of, or in conjunction with any other person:
- (i) 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;
- (ii) 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; or
- (iii) Perform, directly, any or indirectly, any other act injurious to or prejudicial to the goodwill associated with the Marks and the System
The above covenants apply exclusively in the United States of America during the time that you serve as Principal for the Bumper Business and within 25 miles of any then-existing Bumper Man business during the two-year period following the date you cease to be the Principal of the Bumper Business.
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. This agreement is in the form attached as Exhibit B to the Franchise Agreement. Additionally, any spouse or relative of the franchisee who is authorized to perform obligations related to the Bumper Man business must also execute and deliver this Guaranty and Undertaking of Obligations.
This requirement ensures that individuals with a significant stake in the franchisee's business, or those authorized to act on its behalf, are personally liable for the franchisee's obligations under the Franchise Agreement. This provides Bumper Man with an additional layer of security and recourse in case the franchisee fails to meet its contractual obligations. The agreement also includes covenants, representations, and warranties from the principal, further solidifying their commitment to the franchise agreement.
The Guaranty and Undertaking of Obligations also includes non-compete clauses that apply to the Principal. For as long as someone is the Franchisee's Principal and for two years after they cease to be the Franchisee's Principal, 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 individuals with knowledge of Bumper Man's operations from directly competing with the franchise system.
This requirement is a fairly standard practice in franchising, as it protects the franchisor's interests by ensuring that key individuals are personally invested in the success and compliance of the franchise. Prospective Bumper Man franchisees should carefully review Exhibit B and understand the full scope of their obligations under the Guaranty and Undertaking of Obligations before signing the Franchise Agreement.