Under what conditions can Bumper Man terminate the Franchise Agreement due to payment defaults?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
rument you execute.
New franchise operators who purchase a new Bumper Man franchise and who meet our current credit criteria may pay us half of the initial franchisee fee upon the execution of the Franchise Agreement and pay the remaining half (up to $25,000) in 120 equal semi-monthly installments during a five-year term at an interest rate of 10% per annum, secured by your right, title and interest in the Franchise Agreement. Default of your payment obligations under the note constitutes a default under the Franchise Agreement for which we may terminate the Franchise Agreement if you fail to cure your default of your payment obligat
Source: Item 10 — FINANCING (FDD pages 21–22)
What This Means (2025 FDD)
According to Bumper Man's 2025 Franchise Disclosure Document, if a new franchisee operator qualifies for financing of a portion of the initial franchise fee, a default on the payment obligations under the promissory note can lead to the termination of the Franchise Agreement. Specifically, Bumper Man may terminate the Franchise Agreement if the franchisee fails to cure the default of their payment obligations under the note.
Bumper Man offers financing for up to half of the $50,000 initial franchise fee, which amounts to $25,000. This financing is available to new franchise operators who meet Bumper Man's credit criteria. The repayment is structured in 120 equal semi-monthly installments over a five-year term, with an annual interest rate of 10%. The financing is secured by the franchisee's rights, title, and interest in the Franchise Agreement.
This arrangement means that a franchisee's failure to keep up with these semi-monthly payments can trigger a default, potentially leading to the termination of their franchise agreement if the default is not cured. Prospective franchisees should carefully consider their ability to meet these payment obligations to avoid such a situation. It is important to fully understand the terms and conditions of the promissory note and the Franchise Agreement regarding default and termination.