Does Bumble Roofing need to approve the binding agreement for a franchise transfer?
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;
(e) Franchisor's consent to a transfer of any interest subject to the restrictions of this Section shall not constitute a waiver of any claim it may have against the assignor, nor shall it be deemed a waiver of Franchisor's right to demand exact compliance with any of the terms of this Agreement by the assignee;
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2025 FDD)
According to Bumble Roofing's 2025 Franchise Disclosure Document, if a franchisee wishes to transfer any shares or interest in their business entity, they must obtain prior written consent from Bumble Roofing. This applies to corporations, limited liability companies, partnerships, or other business entities.
Specifically, no shares or interests in the capital of such entities can be issued, sold, assigned, transferred, conveyed, donated, pledged, mortgaged, or otherwise encumbered without Bumble Roofing's prior written consent. This restriction applies whether the transfer is voluntary, involuntary, or by operation of law.
To ensure compliance, the business entity must maintain stop transfer instructions against the transfer of shares on its records. Additionally, all outstanding shares must be endorsed with a legend indicating that the transfer is subject to the terms and conditions of the Franchise Agreement with Bumble Roofing Franchisor, LLC. This requirement aims to provide notice to potential buyers or transferees about the restrictions on transferring ownership interests in the Bumble Roofing franchise.
Furthermore, the governing documents of the business entity (articles of incorporation, articles of organization, operating agreement, etc.) must state that its business is confined exclusively to operating the Bumble Roofing franchise and that the issuance and transfer of any ownership interests are restricted by the terms of the Franchise Agreement. Copies of these documents must be furnished to Bumble Roofing upon request. Bumble Roofing's consent to a transfer does not waive any claims it may have against the assignor or its right to demand compliance with the Franchise Agreement by the assignee.