What actions can Bumble Roofing take if a franchisee defaults on the franchise agreement?
Bumble_Roofing Franchise · 2025 FDDAnswer from 2025 FDD Document
The acceptance of any interest payment shall not be construed as a waiver by Franchisor of its rights in respect of the default giving rise to such payment and shall be without prejudice to Franchisor's right to terminate this Agreement in respect of such default.
- 17.8 Upon termination of this Agreement prior to its natural expiration date in accordance with its terms, Franchisee shall pay to Franchisor within thirty (30) days of the date of the termination, as an early termination fee for the premature termination of this Agreement and not as a penalty, an amount equal to twenty-four (24) times the average monthly continuing royalty fees payable to Franchisor over (a) the last twelve (12) months of the Business's active operations, or (b) the entire period the Business has been open for business, whichever is the shorter period.
Franchisee acknowledges and agrees that such early termination fee is a reasonable approximation of the damages Franchisor will incur resulting from the premature termination of the Franchise Agreement as a result of breach by Franchisee, is appropriate because actual damages incurred by Franchisor will be difficult or impossible to ascertain, is not a penalty, and shall not affect Franchisor's right to, and is not in lieu of, any other payment or remedy, damages or relief to Franchisor.
- 17.9 Should Franchisee, or any partnership or joint venture or corporation in which Franchisee has a controlling equity interest, be a franchisee pursuant to another BUMBLE ROOFING® franchise agreement with Franchisor, respecting another franchised Business using the Marks, a default under this Agreement shall constitute a default under such other BUMBLE ROOFING® franchise agreement and vice versa, with like remedies available to Franchisor.
Should such other BUMBLE ROOFING® franchise agreement cease to be valid, binding and in full force and effect for any reason then Franchisor may, at its option terminate this Agreement and this Agreement shall be forthwith surrendered by Franchisee and terminated, and likewise should this Agreement cease to be valid binding and in full force and effect for any, reason, Franchisor may at its option terminate the other BUMBLE ROOFING® franchise agreement and the other BUMBLE ROOFING® franchise agreement shall be forthwith surrendered and terminated.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2025 FDD)
According to Bumble Roofing's 2025 Franchise Disclosure Document, if a franchisee defaults on their franchise agreement, Bumble Roofing has several options. The acceptance of any interest payment from the franchisee will not be considered a waiver of Bumble Roofing's rights regarding the default. Bumble Roofing retains the right to terminate the agreement due to the default.
If Bumble Roofing terminates the agreement before its natural expiration, the franchisee must pay an early termination fee within 30 days of termination. This fee is calculated as 24 times the average monthly continuing royalty fees, based on either the last 12 months of active business operations or the entire period the business has been open, whichever is shorter. The FDD states that Bumble Roofing considers this early termination fee a reasonable estimate of the damages they will incur due to the premature termination and not a penalty.
Furthermore, if a Bumble Roofing franchisee has multiple franchise agreements with Bumble Roofing and defaults on one, it constitutes a default on all agreements. In such a case, Bumble Roofing can pursue the same remedies across all agreements. If one Bumble Roofing franchise agreement ceases to be valid, binding, and in full force, Bumble Roofing can terminate the other agreements at its discretion.