What initial services does Bumble Roofing agree to provide to franchisees after the Franchise Agreement is executed?
Bumble_Roofing Franchise · 2025 FDDAnswer from 2025 FDD Document
Following execution of the Franchise Agreement, the Franchisors agree to provide certain initial services, including advertising material, manuals, website development, training and on-site assistance. The value of the initial services provided exceeds the standalone value individual services performed by the Franchisors. Included in the accompanying consolidated balance sheets is a contract liability, "deferred revenue on franchise sales," which represents initial services that have not yet been completed for franchisees. Upon completion of these initial services, the franchise fees are recognized as revenue in the accompanying statements of income.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 53)
What This Means (2025 FDD)
According to the 2025 Bumble Roofing Franchise Disclosure Document, after a Franchise Agreement is executed, Bumble Roofing agrees to provide certain initial services to franchisees. These services include advertising material, manuals, website development, training, and on-site assistance. The FDD indicates that the value of these initial services exceeds the standalone value of each individual service.
The document also mentions a "contract liability, deferred revenue on franchise sales," which represents initial services that have not yet been completed for franchisees. Once these initial services are completed, Bumble Roofing recognizes the franchise fees as revenue in their financial statements.
This arrangement is typical in franchising, where the initial franchise fee covers not just the right to use the brand but also the support needed to get the business up and running. Prospective Bumble Roofing franchisees should ensure they fully understand the scope and timeline of these initial services, as well as what ongoing support will be provided after the initial phase.