What specific restrictive covenants against competition are included in Section 17 of the Bumper Man franchise agreement?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
17. RESTRICTIVE COVENANTS.
Franchisee recognizes that Franchisor has developed and owns the goodwill in the Brand and must protect the Marks, Confidential Information, and System. Franchisee and its Principals each acknowledges and agrees that the access to and use of Confidential Information authorized by this Agreement are among the consideration for the restrictive covenants set forth in Section 17(a), and Franchisee and its Principals each further acknowledges and agrees that the restrictive covenants set forth in Section 17(a) are necessary to prevent Franchisor from suffering irreparable harm. THE FOREGOING ACKNOWLEDGMENTS AND AGREEMENTS ARE A MATERIAL INDUCEMENT FOR FRANCHISOR TO ALLOW FRANCHISEE AND ITS PRINCIPALS TO HAVE ACCESS TO AND USE CONFIDENTIAL INFORMATION.
- (a) Non-Compete. Franchisee and its Principals covenant and agree that during the Term, and for a continuous uninterrupted period of two years following its expiration, termination, or an approved Transfer and with respect to a Principal, following the date the Principal ceases to be a Principal under this Agreement, Franchisee and each of its Principals, as applicable, will not, without Franchisor's prior written consent, either directly or indirectly, for itself or themselves, or through, on behalf of, or in conjunction with, any Person or Entity:
- (i) 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.
- (ii) Do or perform, directly or indirectly, any other act injurious to or prejudicial to the goodwill associated with the Marks and the System, provided, however, that nothing in this Section 17 or elsewhere in this Agreement restricts or is intended to restrict Franchisee's communications with any state or federal law regulator or enforcement authority about potential violations of law.
- (iii) 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.
During the Term, this restriction applies to any Competitive Business located within the United States. Following the expiration of the Term, termination of this Agreement, or an approved Transfer of this Agreement and with respect to a Principal, following the date the Principal ceases to be a Principal under this Agreement, this restriction will apply to any Competitive Business located within 25 miles of the Designated Area and any other Bumper Man business, except as otherwise approved in writing by Franchisor.
If any part of these restrictions is found to be unreasonable in time or distance, each month of time or mile of distance may be deemed a separate unit so that the time or distance may be reduced by appropriate order of the court to that deemed reasonable. If, at any time during the two-year period following the expiration, termination, or approved Transfer of this Agreement or the date any Principal ceases to be a Principal under this Agreement, Franchisee or any of its Principals fails to comply with its obligations under this Section 17(a), that period of non-compliance will not be credited toward satisfaction of the two-year period.
Source: Item 23 — RECEIPTS (FDD pages 45–180)
What This Means (2025 FDD)
According to the 2025 Bumper Man Franchise Disclosure Document, Section 17 outlines specific restrictive covenants related to competition that apply to both the franchisee and their principals. These covenants are in place to protect Bumper Man's brand, trademarks, confidential information, and overall system. Franchisees acknowledge that access to confidential information is a key consideration for agreeing to these restrictions. These covenants are a material inducement for Bumper Man to allow franchisees and their principals access to and use confidential information.
During the term of the franchise agreement, and for two years after its expiration, termination, or transfer, franchisees and their principals are restricted from engaging in activities that could harm Bumper Man's business. Specifically, they cannot divert or attempt to divert any actual or prospective business or customers to a competitive business. They are also prohibited from performing any act that could be injurious or prejudicial to the goodwill associated with Bumper Man's trademarks and system.
Furthermore, franchisees and their principals are restricted from owning, maintaining, operating, being employed by, engaging in, franchising, leasing property to, advising, helping, making loans to, or having any interest in any competitive business. During the term of the agreement, this restriction applies to any competitive business located within the United States. After the agreement ends, the restriction applies to any competitive business located within 25 miles of the designated area and any other Bumper Man business, unless otherwise approved in writing by Bumper Man. If any part of these restrictions is deemed unreasonable, the time or distance may be reduced by a court order to what is considered reasonable. Any period of non-compliance during the two-year restriction period will not count towards fulfilling the obligation.