What section of the Bumper Man Franchise Agreement addresses non-competition covenants after the franchise is terminated or expires?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| p. Your death or disability | Section 16(f) | Upon death or disability of your Operating Principal or if we determine the death or disability of your Operating Principal adversely affects the operation of the Bumper Business, you must transfer your Operating Principal's interest in you to us or a third party approved by us within two months of such death or disability. |
| 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 the 2025 Bumper Man Franchise Disclosure Document, Section 17(a) of the Franchise Agreement outlines the non-competition covenants that apply after the franchise is terminated or expires. This section specifies that for a two-year period following the termination or expiration of the Franchise Agreement, both the franchisee and their principals are restricted from engaging in any competitive business activities. This restriction also applies to the principals for two years after they cease being a principal as defined in the Franchise Agreement.
Specifically, franchisees and their principals are prohibited from diverting business or customers to competitors, performing any actions that could harm the goodwill associated with the Bumper Man brand and system, and from owning, operating, or being involved in any capacity with a competitive business. This includes activities such as employment, franchising, leasing property to, advising, helping, or providing loans to a competing business.
The non-competition covenant applies within the franchisee's Designated Area as defined in the Franchise Agreement, or within 25 miles of any Bumper Man business. This means that after leaving the Bumper Man system, franchisees and their principals must avoid any competitive ventures within these geographic boundaries for the specified two-year period.
It is important for prospective franchisees to carefully review Section 17(a) of the Franchise Agreement to fully understand the scope and limitations of these post-termination non-competition covenants. Franchisees should also be aware that Section 26(c) of the Franchise Agreement states that Bumper Man may unilaterally change the scope of the competition covenants.