What sections of the Bumble Roofing franchise agreement must the franchisee comply with upon termination?
Bumble_Roofing Franchise · 2025 FDDAnswer from 2025 FDD Document
The acceptance of any interest payment shall not be construed as a waiver by Franchisor of its rights in respect of the default giving rise to such payment and shall be without prejudice to Franchisor's right to terminate this Agreement in respect of such default.
- 17.8 Upon termination of this Agreement prior to its natural expiration date in accordance with its terms, Franchisee shall pay to Franchisor within thirty (30) days of the date of the termination, as an early termination fee for the premature termination of this Agreement and not as a penalty, an amount equal to twenty-four (24) times the average monthly continuing royalty fees payable to Franchisor over (a) the last twelve (12) months of the Business's active operations, or (b) the entire period the Business has been open for business, whichever is the shorter period.
Franchisee acknowledges and agrees that such early termination fee is a reasonable approximation of the damages Franchisor will incur resulting from the premature termination of the Franchise Agreement as a result of breach by Franchisee, is appropriate because actual damages incurred by Franchisor will be difficult or impossible to ascertain, is not a penalty, and shall not affect Franchisor's right to, and is not in lieu of, any other payment or remedy, damages or relief to Franchisor.
- 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, several sections of the franchise agreement outline the franchisee's obligations upon termination.
Specifically, section 17.8 states that upon termination of the agreement before its natural expiration, the franchisee must pay Bumble Roofing an early termination fee within 30 days of termination. This fee is calculated as 24 times the average monthly continuing royalty fees, based on either the last 12 months of active operation or the entire period the business has been open, whichever is shorter. Bumble Roofing considers this fee a reasonable estimate of damages due to premature termination and not a penalty.
Additionally, section 17.9 stipulates that if the franchisee has other Bumble Roofing franchise agreements, a default under one agreement constitutes a default under all others, and Bumble Roofing can terminate all agreements. If any other Bumble Roofing franchise agreement ceases to be valid, Bumble Roofing can terminate the current agreement, and vice versa.
While these sections detail financial and cross-default obligations upon termination, the FDD excerpts do not provide a comprehensive list of ALL sections a franchisee must comply with upon termination. For a complete understanding, a prospective franchisee should carefully review the entire franchise agreement and consult with a legal professional to identify all applicable post-termination obligations.