What secures the franchisee's payment obligations under the financing note with Bumper Man?

According to Bumper Man's 2025 Franchise Disclosure Document, a new franchisee operator who meets Bumper Man's credit criteria may finance a portion of the initial franchise fee. Specifically, the franchisee's payment obligations under the financing note with Bumper Man are secured by the franchisee's right, title, and interest in the Franchise Agreement. This means that if the franchisee fails to meet their payment obligations, Bumper Man has a legal claim on the franchisee's rights and interests in the franchise itself.

The financing arrangement allows qualified new franchise operators to pay half of the initial franchise fee upfront and finance the remaining half, up to $25,000. This financed amount is then paid in 120 equal semi-monthly installments over a five-year term, with an annual interest rate of 10%. The security interest in the Franchise Agreement provides Bumper Man with recourse in case of default, protecting their financial stake in the arrangement.

It is important to note that defaulting on the payment obligations under the financing note constitutes a default under the Franchise Agreement. This gives Bumper Man the right to terminate the Franchise Agreement if the franchisee fails to cure the default. This highlights the importance of franchisees carefully considering their financial capacity and ensuring they can meet the payment obligations before entering into the financing agreement with Bumper Man.