What is the liability structure if there is more than one franchisee for a Bumble Roofing franchise?
Bumble_Roofing Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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)
Based on the 2025 Bumble Roofing Franchise Disclosure Document, if a franchisee has a controlling equity interest in another Bumble Roofing franchise, a default in one agreement constitutes a default in the other, giving Bumble Roofing the same remedies under both agreements. Specifically, if one franchise agreement ends for any reason, Bumble Roofing has the option to terminate the other agreement. This creates a situation of cross-default, linking the performance and standing of multiple franchises under common ownership.
This interconnectedness has significant implications for franchisees who own or plan to own multiple Bumble Roofing locations. A problem at one location could trigger consequences for all locations under the same ownership structure. This could include termination of all franchise agreements, regardless of the individual performance of each location.
This clause aims to protect Bumble Roofing by ensuring consistent compliance and performance across all franchises owned by the same entity. However, it also increases the risk for franchisees with multiple locations, as the failure of one can jeopardize the entire portfolio. Prospective franchisees should carefully consider this cross-default provision and its potential impact on their overall investment and operational strategy.
It is important for potential franchisees to seek legal counsel to fully understand the implications of this clause and how it might affect their specific circumstances, especially if they are considering owning multiple Bumble Roofing franchises.