What specific rights and obligations does the Bumble Roofing License grant to the franchisee during the initial term?
Bumble_Roofing Franchise · 2025 FDDAnswer from 2025 FDD Document
itten approval of Franchisor, which approval may be granted or withheld in Franchisor's sole discretion.
3. TERM OF THE AGREEMENT AND LICENSE
3.1 This Agreement and the License granted shall continue for a period of seven years ("Initial Term"). This Initial Term shall begin on the date this Agreement is executed by Franchisor, subject, however, to termination in accordance with the provisions of this Agreement. When the Initial Term expires Franchisee shall have the option to extend its rights to operate the Roofing Business for one additional term equal to the length of Franchisor's then-current initial term as described in its then-current BUMBLE ROOFING® franchise agreement ("Successor Term"), provided Franchisor determines in its sole and absolute discretion that Franchisee has met all of the following requirements:
- (a) Franchisee has not failed to remedy any breach of this Agreement specified by Franchisor in a written notice to Franchisee as per Sections 17.1 or 17.2;
- (b) Franchisee has not committed and received notice of two or more breaches of this Agreement in the 12 months prior to the end of the current Initial Term, even if such breaches were timely remedied;
- (c) Franchisee has given Franchisor a written notice of intent to extend its rights to operate the Roofing Business no less than two months or more than six months prior to expiration of the Initial Term;
- (d) Franchisee is current in its payment obligations to Franchisor, Franchisor's Affiliates, and Franchisee's trade creditors;
- (e) Franchisee has met Franchisor's then-current qualifications for new or renewing BUMBLE ROOFING® franchisees;
- (f) Franchisee executes a successor franchise agreement ("Successor Franchise Agreement") and all other agreements in the form then being used by Franchisor in granting new franchises, which may contain materially different terms and conditions than this Agreement, provided that Franchisee will pay Franchisor the Successor Franchise Fee (defined below) instead of the Initial Franchise Fee and the Successor Term will be no less than five years, as described above.
- (g) Franchisee pays Franchisor the successor franchise fee equal to the greater of $5,000 or 25% of the then existing Initial Franchise Fee as described in the Franchisors then existing Franchise Agreement ("Successor Franchise Fee"), which is due and payable to Franchisor at the time of signing the Successor Franchise Agreement;
- (h) Franchisee executes a general release of all claims Franchisee may have against Franchisor, its officers, directors, members, shareholders, agents, Affiliates, and employees, whether in their corporate and/or individual capacities. This release shall include all claims arising under any federal, state, or local law, rule, or ordinance arising out of or concerning this Agreement (to the fullest extent permitted by law) and shall be in a form satisfactory to Franchisor;
- (i) Franchisee has upgraded the computer system and vehicle used in operations of the Business to Franchisor's then-current standards;
- (j) Franchisee has provided Franchisor with proof of current licenses, insurance and any necessary permits; and
- (k) Franchisee has met any other conditions that Franchisor reasonably requires.
- 3.2 Franchisor reserves the right, but not the obligation, in Franchisor's sole discretion, to modify Franchisee's Territory at the time Franchisee executes a Successor Franchise Agreement to conform the size of Franchisee's Territory to Franchisor's then-current standards for protected territorial areas that are being granted to new BUMBLE ROOFING® franchisees, for example, if there has been an increase or decrease in the population or number of qualified households within Franchisee's original Territory, or if Franchisor uses different standards or calculations in determining the size of protected territories that are granted to new BUMBLE ROOFING® franchisees. If at the time Franchisee intends to execute a Successor
Franchise Agreement the size of Franchisee's original Territory encompasses more than one protected territory based upon Franchisor's then-current standards for determining protected territories for new BUMBLE ROOFING® franchisees, then Franchisor we may require Franchisee to execute multiple Successor Franchise Agreements if Franchisee wishes to continue operating within the entire original Territory.
- 3.3 Franchisee's failure to give timely notice of Franchisee's intention to extend its rights to operate the Roofing Business, as described in Section 3.1(d) shall be deemed an election not to extend Franchisee's rights to operate the Roofing Business. IN FRANCHISOR'S SOLE DETERMINATION, FRANCHISEE MAY BE DEEMED TO HAVE IRREVOCABLY DECLINED TO EXTEND FRANCHISEE'S RIGHTS TO OPERATE THE ROOFING BUSINESS (AND ITS OPTION SHALL THEREUPON TERMINATE) IF IT FAILS TO EXECUTE AND RETURN TO FRANCHISOR THE SUCCESSOR FRANCHISE AGREEMENT AND OTHER DOCUMENTS REQUIRED BY FRANCHISOR WITHIN 30 DAYS AFTER THEIR DELIVERY TO FRANCHISEE, OR FAILS TO COMPLY IN ANY OTHER WAY WITH THE PROVISIONS OF THIS SECTION 3.
- 3.4 If Franchisee does not sign a Successor Franchise Agreement prior to the expiration of this Agreement and continues to accept the benefits of this Agreement after the expiration of this Agreement, then at the option of Franchisor, this Agreement may be treated either as (i) expired as of the date of expiration with Franchisee then operating without a license or franchise to do so and in violation of Franchisor's rights; or (ii) continued on a month-to-month basis ("Interim Period") until one party provides the other with written notice of such party's intent to terminate the Interim Period, in which case the Interim Period will terminate 30 days after receipt of the notice to terminate the Interim Period. In the latter case, all obligations of Franchisee shall remain in full force and effect during the Interim Period as if this Agreement had not expired, and all obligations and restrictions imposed on Franchisee upon expiration of this Agreement shall be deemed to take effect upon termination of the Interim Period.
**4.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2025 FDD)
According to Bumble Roofing's 2025 Franchise Disclosure Document, the franchise agreement grants specific rights and imposes obligations on the franchisee during the initial seven-year term. A key right is the exclusive territory, detailed in Attachment A, where Bumble Roofing agrees not to establish or license another person to establish a competing Roofing Business using the same marks. However, this right is contingent on the franchisee's compliance with all obligations under the agreement.
Despite the exclusive territory, Bumble Roofing retains several rights that impact the franchisee. These include the right to use and license others to use the marks and system outside the franchisee's territory, use other trademarks, offer services through alternative channels like e-commerce, and use websites with domain names similar to "Bumble Roofing". These stipulations mean that while franchisees have some territorial protection, Bumble Roofing can still operate and license others outside that territory and even leverage similar branding for other ventures.
The Bumble Roofing franchisee also has advertising and promotional obligations. During the first year, a franchisee must spend a minimum of $65,000 on promotional advertising within their territory, plus $15,000 for each additional contiguous territory. After the first year, this requirement continues, mandating the greater of $65,000 (plus $15,000 per additional territory) or 5% of the prior year's gross revenues. Franchisees must provide monthly or yearly accountings of their advertising expenditures to Bumble Roofing, and Bumble Roofing has the right to collect the minimum required advertising investment and administer it on the franchisee's behalf.
The franchise agreement also outlines conditions for extending the franchise term. To extend the rights to operate the Roofing Business beyond the initial term, the franchisee must meet several requirements. These include remedying any breaches of the agreement, avoiding multiple breaches in the year before the term's end, providing timely notice of intent to extend, staying current on payment obligations, meeting Bumble Roofing's qualifications for new or renewing franchisees, and executing a successor franchise agreement. This successor agreement may contain materially different terms and conditions, and requires payment of a Successor Franchise Fee, which is the greater of $5,000 or 25% of the then-existing Initial Franchise Fee.