Does the Bumble Roofing non-compete agreement prevent a franchisee from guaranteeing the debts of a competing business during the initial term?
Bumble_Roofing Franchise · 2025 FDDAnswer from 2025 FDD Document
14.2 Restrictive Covenants. Franchisee covenants and agrees that:
- (a) During the Initial Term of this Agreement and any Interim Period thereof, Franchisee, its owners, guarantors and Designated Business Managers shall not, without the prior written consent of Franchisor, either individually or in a partnership, corporation, limited liability company, joint venture or other business entity or jointly or in conjunction with any person, firm, association, syndicate or corporation, as principal, agent, shareholder, member, partner, employee or in any manner whatsoever, carry on or be engaged in or be concerned with or interested in or advise, lend money to, guarantee the debts or obligations of or permit its name or any part thereof to be used or employed in any business operating in competition with a roofing business or any Business as carried on during the Initial Term of this Agreement, including any Interim Period thereof.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2025 FDD)
According to Bumble Roofing's 2025 Franchise Disclosure Document, the non-compete agreement does restrict a franchisee from guaranteeing the debts of a competing business during the initial term. Specifically, during the Initial Term of the Franchise Agreement, the franchisee, its owners, guarantors, and Designated Business Managers are prohibited from guaranteeing the debts or obligations of any business operating in competition with Bumble Roofing, without prior written consent from Bumble Roofing. This restriction applies whether the franchisee is acting individually or through any business entity.
This means that as a Bumble Roofing franchisee, you, along with your owners, guarantors, and designated business managers, cannot financially support a competing roofing business by guaranteeing its debts. This restriction is in place to protect Bumble Roofing from unfair competition during the term of your agreement.
This non-compete obligation extends to anyone with an ownership stake in the franchise, as well as anyone acting as a guarantor for the franchise's obligations. It also applies to the Designated Business Manager, who is responsible for the daily operations of the Bumble Roofing franchise. This is a fairly standard practice in franchising, as franchisors want to prevent franchisees from using their knowledge and resources gained from the franchise to benefit a competing business.
It is important to note that this restriction is in effect during the Initial Term of the Franchise Agreement. If a franchisee wishes to engage in such activities, they must obtain prior written consent from Bumble Roofing. Violation of this clause could result in a breach of the Franchise Agreement and potential legal consequences.