Under what conditions can the Bumper Man agreement be terminated immediately for repeated default?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) Termination for Repeated Default. This Agreement will terminate immediately upon delivery of Notice to Franchisee if Franchisee (or any of its Principals) fails on three or more separate occasions within any period of 12 consecutive months to do any one or more or combination of the following: (1) submit when due reports or other data, information or supporting record; (2) pay when due any amounts due to Franchisor or its Affiliates; or (3) otherwise materially comply with this Agreement, whether or not such failures are corrected after Notice of such failure is delivered to Franchisee.
Source: Item 23 — RECEIPTS (FDD pages 45–180)
What This Means (2025 FDD)
According to Bumper Man's 2025 Franchise Disclosure Document, the franchise agreement can be terminated immediately if the franchisee repeatedly fails to meet certain obligations. Specifically, Bumper Man can terminate the agreement with immediate notice if the franchisee, or any of its principals, fails on three or more separate occasions within any 12-month period to: submit reports or data when due, pay amounts owed to Bumper Man or its affiliates when due, or otherwise materially comply with the agreement. These failures can trigger immediate termination, regardless of whether the franchisee corrects the issues after receiving notice.
This termination clause highlights the importance of consistent compliance with the franchise agreement. Franchisees must ensure timely submission of required reports and data, prompt payment of all dues to Bumper Man, and adherence to all other material terms of the agreement. The 'materially comply' clause is broad, meaning any significant breach of the agreement, repeated within the 12-month window, could lead to termination.
For a prospective Bumper Man franchisee, this means implementing robust systems to manage reporting, payments, and overall compliance. It would be prudent to seek clarification from Bumper Man regarding what constitutes 'material compliance' to avoid misunderstandings. The immediate termination aspect underscores the need for franchisees to prioritize and maintain consistent operational standards to safeguard their investment and franchise rights.
This type of clause is not uncommon in franchise agreements, as franchisors need to protect their brand and ensure consistent standards across all locations. However, the 'three strikes' provision within a year, coupled with immediate termination, is a stricter condition than some franchises, where a longer cure period might be offered for repeated but correctable offenses.