Under what conditions will Bumble Roofing consent to the assignment of a franchisee's rights to a wholly-owned business entity?
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;
(e) Franchisor's consent to a transfer of any interest subject to the restrictions of this Section shall not constitute a waiver of any claim it may have against the assignor, nor shall it be deemed a waiver of Franchisor's right to demand exact compliance with any of the terms of this Agreement by the assignee;
(f) The corporation, partnership, limited liability company or other business entity shall advise Franchisor and keep Franchisor current as to the names and addresses of the directors, officers, members, partners and shareholder of and those persons financially involved in the corporation, partnership, limited liability company or other business entity; and
(g) Franchisee agrees to devote its full time and best efforts to manage the day-to-day operations of the Business unless it has an operational partner or Designated Business Manager approved by Franchisor.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2025 FDD)
According to the 2025 Bumble Roofing Franchise Disclosure Document, if a franchisee wishes to assign their rights to a corporation, limited liability company, partnership, or other business entity, they must first obtain written consent from Bumble Roofing. Bumble Roofing also requires adherence to several conditions to grant consent.
First, the franchisee cannot issue or transfer any shares or interest in the business entity without Bumble Roofing's prior written consent. The business entity must also maintain stop transfer instructions against the transfer of shares and include a specific legend on all outstanding share certificates, indicating that the transfer is subject to the terms and conditions of the Bumble Roofing Franchise Agreement. This ensures that any potential transfer of ownership remains under Bumble Roofing's control and awareness.
Additionally, the business entity's governing documents (articles of incorporation, operating agreement, etc.) must confine its business exclusively to the operation of the Bumble Roofing franchise. These documents must also state that the issuance and transfer of any shares or interests are restricted by the terms of the Franchise Agreement, and copies of these documents must be provided to Bumble Roofing upon request. The franchisee must also keep Bumble Roofing informed about the names and addresses of all directors, officers, members, partners, shareholders, and those financially involved in the business entity.
Finally, the franchisee must devote their full time and best efforts to managing the day-to-day operations of the business, unless they have an operational partner or Designated Business Manager approved by Bumble Roofing. Even with consent to transfer interests, Bumble Roofing retains all claims against the assignor and the right to demand compliance from the assignee. These stipulations ensure that the Bumble Roofing franchise maintains its operational standards and that the franchisor retains control over the franchise's ownership and management.