What is the purpose of the additional disclosure in Item 17 for Bumble Roofing?
Bumble_Roofing Franchise · 2025 FDDAnswer from 2025 FDD Document
The franchise agreement requires franchisee to execute a general release of claims upon renewal or transfer of the franchise agreement. California Corporations Code Section 31512 provides that any condition, stipulation or provision purporting to bind any person acquiring any franchise to waive compliance with any provision of that law or any rule or order there under is void. Section 31512 voids a waiver of your rights under the Franchise Investment Law (California Corporations Code Section 20010 voids a waiver of your rights under the Franchise Relations Act (Business and Professions Code Sections 20000 – 20043).
The franchise agreement requires application of the laws of the Commonwealth of Virginia. This provision may not be enforceable under California law.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 43–45)
What This Means (2025 FDD)
According to the 2025 Bumble Roofing Franchise Disclosure Document, Item 17 includes additional disclosures that address specific state laws regarding franchise agreements. These disclosures primarily aim to inform prospective franchisees of their rights and protections under state franchise laws, which may differ from the standard terms outlined in the franchise agreement. These disclosures are crucial because franchise laws vary significantly from state to state, and some standard franchise agreement terms might not be enforceable in certain jurisdictions.
For example, the California addendum clarifies that a franchisee cannot waive their rights under the California Franchise Investment Law or the Franchise Relations Act, despite any general release required by the franchise agreement upon renewal or transfer. It also notes that the franchise agreement's requirement for applying Virginia laws may not be enforceable in California. Similarly, the Illinois addendum states that Illinois law governs the franchise agreement, invalidates any provision designating jurisdiction or venue outside Illinois (except for arbitration), and protects franchisees from waiving compliance with the Illinois Franchise Disclosure Act.
The Maryland addendum ensures that franchisees' rights under the Maryland Franchise Registration and Disclosure Law are not waived by any general release. It also addresses potential conflicts regarding arbitration clauses and the right to file lawsuits in Maryland. The Minnesota addendum prohibits litigation outside of Minnesota, waiver of jury trials, and consent to liquidated damages or termination penalties, reinforcing franchisees' rights under Minnesota law. Finally, the New York addendum clarifies that franchisees do not waive claims under the New York General Business Law by signing a general release.
In essence, these state-specific addenda in Item 17 serve to protect franchisees by ensuring they are aware of their legal rights and that the franchise agreement complies with local laws. Prospective Bumble Roofing franchisees should carefully review these addenda to understand how their rights may be affected by the laws of their specific state.