What actions are Boulder Designs franchisees prohibited from taking that would reduce goodwill towards Boulder Designs, other franchisees, or the system after termination or expiration?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee agrees to refrain from taking any action to reduce the goodwill of Franchisee's customers or potential customers towards Franchisor, our Franchisees or any other aspect of the System.
Section 17.2 Post-Termination Covenant Not to Compete
Franchisee acknowledges the restrictive covenants contained in this Section and in Section 17.1 are fair and reasonable and will not impose any undue hardship on Franchisee or any Covered Person, since Franchisee and Covered Person has other considerable skills, experience, and education which afford Franchisee and Covered Person the opportunity to derive income from other endeavors, and are justifiably required for purposes including, but not limited to, the following:
- i. protecting the Trade Secrets and other Confidential Information of Franchisor;
- ii. inducing Franchisor to grant a Franchise to Franchisee; and
- iii. inducing Franchisor to incur costs in training Franchisee and its officers, directors, executives, managers, Internal Managers and any other Covered Person, if necessary.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, upon termination or expiration of the franchise agreement, a franchisee must refrain from any action that could diminish the goodwill of Boulder Designs' customers or potential customers toward Boulder Designs, other franchisees, or any aspect of the Boulder Designs system.
Specifically, franchisees must immediately cease operating the franchised business, shutter any office open to the public, and not represent themselves as current or former Boulder Designs franchisees. They must also deliver all information, including contracts and customer data, to Boulder Designs. Additionally, franchisees must stop using confidential information, the Boulder Designs system, and trademarks, including logos and advertising materials.
These restrictions are designed to protect Boulder Designs' brand reputation and the interests of other franchisees within the system. A franchisee must also make necessary modifications to their business to differentiate it from other Boulder Designs franchises if they choose to operate a non-competitive business after the agreement terminates. This includes changes to the business's appearance to avoid association with the Boulder Designs brand.