What action by Boulder Designs Franchising, LLC constitutes a non-curable default under the lease?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) If Franchisor cures Tenant's default, or if Franchisor notifies Landlord that the Franchise Agreement has been terminated (which termination shall constitute a non-curable default pursuant to the Lease upon Landlord's receipt of Franchisor's notice thereof), Landlord agrees, upon Franchisor's written request, to assign to Franchisor any and all rights that Landlord may have under the Lease to remove and evict Tenant from the Premises and shall cooperate with Franchisor in order to pursue such action to a conclusion.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, if Boulder Designs notifies the landlord that the Franchise Agreement has been terminated, this constitutes a non-curable default under the lease. This becomes effective upon the landlord's receipt of Boulder Designs' notice.
This provision is significant for a prospective franchisee because it outlines a specific scenario where the franchise agreement's termination automatically triggers a default under the lease agreement, which the franchisee cannot remedy. This could lead to immediate eviction and loss of the business location.
Boulder Designs retains the right to cure a franchisee's default, but the termination of the Franchise Agreement is an action that cannot be cured. This clause protects the landlord by providing a clear trigger for default if the franchise relationship ends, regardless of whether the franchisee is otherwise meeting their lease obligations. It also gives Boulder Designs some control over the location, as they can terminate the lease by terminating the franchise agreement.