Who is considered a 'Covered Person' under the Boulder Designs franchise agreement?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
Covered Person shall mean an individual who falls within the identified categories where on the Effective Date or later during the Term;
"Customer(s)" means any person or entity that purchases or receives good or services from Franchisee, as applicable;
"Effective Date" means the date set forth in the introductory paragraph of this Agreement which commences this Agreement's effectiveness and term;
"Electronic Depository Transfer Account" means an account established at a national banking institution approved by Franchisor and providing Franchisor with access to electronically withdraw any funds due Franchisor;
"Former Franchisee" means any Boulder Designs franchisee(s) that have been terminated or whose Franchise Agreements have expired naturally under the terms of those Franchise Agreements.
"Franchise" means the right granted to Franchisee by Franchisor to use the System and the Marks, while not in Default;
"Franchised Business" means the BOULDER DESIGNS Business to be established and operated by Franchisee pursuant to this Agreement;
"Franchisee" means the individual or entity defined as "Franchisee" in the introductory paragraph of this Agreement;
"Franchisor" means Boulder Designs Franchising, LLC;
"Franchisor Indemnitees" means Franchisor and its Affiliates, successors, assigns, and designees of either entity and their respective directors, officers, employees, agents, shareholders, designs, and representatives of each, members, partners, owners, employees, agents, successors and assigns as further discussed in Section 21.3;
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, a 'Covered Person' is defined as an individual falling within identified categories, effective from the agreement's start date or later during its term. While the FDD excerpt defines numerous terms such as 'Customer,' 'Effective Date,' 'Electronic Depository Transfer Account,' 'Former Franchisee,' 'Franchise,' 'Franchised Business,' 'Franchisee,' and 'Franchisor,' it does not explicitly list or describe the categories of individuals who would be considered 'Covered Persons.'
Given that the definition of 'Covered Person' is not fully detailed in the provided excerpts, it is important to understand the implications of this term within the franchise agreement. The document references restrictions and obligations pertaining to 'Covered Persons,' particularly regarding confidentiality, non-competition, and intellectual property. Without a clear understanding of who constitutes a 'Covered Person,' a franchisee may inadvertently violate the terms of the agreement.
Prospective Boulder Designs franchisees should seek clarification from the franchisor regarding the specific categories or roles that qualify an individual as a 'Covered Person.' Understanding this definition is crucial for ensuring compliance with the franchise agreement and avoiding potential disputes or breaches related to confidentiality, competitive activities, or intellectual property rights. It is advisable to request examples or scenarios that illustrate how the 'Covered Person' designation applies in practice.