What restrictions must Bumble Roofing franchisees include in their business entity's governing documents regarding the business's objectives and the transfer of ownership interests?
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;
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2025 FDD)
According to Bumble Roofing's 2025 Franchise Disclosure Document, franchisees must adhere to specific restrictions concerning their business entity's governing documents. These stipulations primarily relate to the scope of the business's objectives and any transfer of ownership interests. The governing documents, including articles of incorporation, organization, operating agreements, partnership agreements, shareholder agreements, and bylaws, must explicitly state that the business's objectives are strictly limited to operating as a Bumble Roofing franchise as outlined in the Franchise Agreement.
Furthermore, these documents must also clearly state that any issuance or transfer of shares, membership interests, partnership interests, or other forms of ownership are restricted by the terms of the Franchise Agreement. Franchisees are required to provide copies of these governing documents to Bumble Roofing upon request, ensuring transparency and adherence to the franchisor's standards.
In practical terms, this means a prospective Bumble Roofing franchisee cannot diversify their business objectives beyond the scope of the franchise without violating the agreement. Additionally, any potential transfer of ownership requires careful consideration of the Franchise Agreement's terms, as these transfers are restricted and require the franchisor's prior written consent. This protects Bumble Roofing's brand and ensures that any new owners meet their standards and obligations. The corporation must also maintain stop transfer instructions against the transfer of shares on its records and include a specific legend on all outstanding shares indicating the transfer is subject to the terms of the Franchise Agreement with Bumble Roofing Franchisor, LLC.