What happens if a Bumble Roofing franchisee attempts to sub-franchise without approval?
Bumble_Roofing Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) No shares or interest in the capital of such corporation, limited liability company, partnership or other business entity shall be issued nor shall Franchisee directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, sell, assign, transfer, convey, donate, pledge, mortgage or otherwise encumber any such shares or interest or offer or attempt to do so or permit the same to be done without Franchisor's prior written consent;
- (c) The corporation shall maintain stop transfer instructions against the transfer of shares on its records subject to the restrictions of this Section and shall have all outstanding shares endorsed with the following legend printed conspicuously upon the face of each certificate:
"The transfer of this certificate is subject to the terms and conditions of a certain Franchise Agreement with BUMBLE ROOFING FRANCHISOR, LLC Reference is made to said Franchise Agreement and to the restrictive provisions of the articles of this corporation."
- (d) The articles of incorporation, articles of organization, operating agreement, partnership agreement, shareholder agreement, and by-laws of the corporation, limited liability company, partnership or other business entity shall provide that its objectives or business is confined exclusively to the operation of the Business as provided for in this Agreement, and recite that the issuance and transfer of any shares, membership interest, partnership interest or other interest is restricted by the terms of this Agreement, and copies thereof shall be furnished to Franchisor upon request;
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Bumble Roofing franchisees cannot sub-franchise. The document states that franchisees cannot sell, assign, transfer, convey, donate, pledge, mortgage, or otherwise encumber any shares or interest in the business without the prior written consent of Bumble Roofing. This restriction applies to corporations, limited liability companies, partnerships, or other business entities through which the franchise may be operated.
To ensure compliance, Bumble Roofing requires specific measures to be in place. Stop transfer instructions must be maintained against the transfer of shares, and all outstanding shares must be endorsed with a legend indicating that the transfer is subject to the terms and conditions of the Franchise Agreement. The organizational documents of the business entity must also state that its objectives are confined exclusively to the operation of the Bumble Roofing business and that the issuance and transfer of any interests are restricted by the Franchise Agreement.
If a franchisee violates these restrictions and attempts to transfer any interest without Bumble Roofing's approval, it would constitute a breach of the Franchise Agreement. While the specific consequences of such a breach are not detailed in this section, it generally gives Bumble Roofing the right to pursue legal remedies, including termination of the franchise agreement. Prospective franchisees should seek clarification from Bumble Roofing regarding the specific penalties for unauthorized transfers to fully understand the implications.