What is the effect of the Federal Bankruptcy laws on the termination provisions related to bankruptcy of a Bumble Roofing franchisee?

According to Bumble Roofing's 2025 Franchise Disclosure Document, the Federal Bankruptcy laws may impact the enforcement of termination provisions related to a franchisee's bankruptcy. Specifically, the Item 17 disclosures for Maryland and Virginia state that the franchisor's ability to terminate the Franchise Agreement due to the franchisee's bankruptcy may not be enforceable under federal law (11 U.S.C.A. 101 et seq.).

This means that if a Bumble Roofing franchisee declares bankruptcy, Bumble Roofing's standard contractual rights to terminate the franchise agreement might be limited. Federal bankruptcy laws are designed to protect debtors, and these laws could override certain termination clauses in the franchise agreement that would otherwise allow Bumble Roofing to terminate the agreement.

Prospective franchisees should be aware that the interplay between the franchise agreement and federal bankruptcy law can be complex. It is advisable to consult with a legal professional to fully understand the implications of bankruptcy on their franchise agreement and their rights and obligations in such a situation. This is especially important for franchisees in Maryland and Virginia, given the specific disclosures in the FDD.