Who benefits from the Boulder Designs agreement?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
This Agreement shall be effective as of the Effective Date and shall be binding upon the successors and assigns of Individual, Individual's family members, ancestors, descendants, and collaterals, and shall inure to the benefit of Franchisee, its subsidiaries, successors and assigns and Boulder Designs Franchising, LLC.
The Company shall be a third-party beneficiary of this Agreement.
If individual violates this Agreement and competes with Franchisor, its Assigns, or any Franchisees, Franchisor has the right to require that all sales made by the competitive business are reported to Franchisor. Individual will also pay to Franchisor, without demand, a weekly fee of $1000, retroactive to the first date of the violation and for each week that the violation continues or until judicial order is entered, without being deemed to revive or modify this Agreement. These payments are liquidated damages to compensate Franchisor for its damages from Individual's violation of this covenant not to compete and are not a penalty.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, the agreement primarily benefits Boulder Designs Franchising, LLC, and its franchisees. The document states that the company is a third-party beneficiary of the agreement. This means Boulder Designs Franchising, LLC, as the franchisor, directly benefits from the terms and conditions outlined in the franchise agreement.
Additionally, the agreement is designed to protect the franchisor's interests, including its trademarks, systems, and confidential information. For example, if an individual violates the agreement and competes with Boulder Designs, the franchisor has the right to require sales reports from the competitive business and impose a weekly fee of $1000. This fee serves as liquidated damages to compensate Boulder Designs for losses resulting from the individual's violation of the non-compete covenant.
Furthermore, the franchise agreement inures to the benefit of the franchisee, its subsidiaries, successors, and assigns. This ensures that the franchisee and its related entities can also rely on and enforce the terms of the agreement. The agreement also addresses the protection of confidential information, ensuring that neither the individual nor the franchisee divulges trade secrets or confidential information to third parties, which protects the Boulder Designs system and brand.