factual

What constitutes an unfair method of competition for a Boulder Designs franchisee regarding Trade Secrets or other Confidential Information?

Boulder_Designs Franchise · 2025 FDD

Answer from 2025 FDD Document

ans a corporation, limited liability company, limited partnership or other entity created pursuant to statutory authority.

  • "Competitive Business" means any business that offers or provides (or grants franchises or licenses to others to operate a business that offers or provides) engraved concrete signage or concrete landscaping products or other products or services that are the same as or similar to those sold by the Franchised Business or in which Trade Secrets or other Confidential Information could be used to the disadvantage of Franchisor, any Affiliate or Boulder Designs' other franchisees; provided, however, that the term "Competitive Business" shall not apply to (a) any business operated by Franchisee under a franchise agreement with Franchisor, (b) any business operated by a publicly-held entity in which Franchisee owns less than a 5% legal or beneficial interest.
  • "Confidential Information" means all technical and non-technical information used in or related to BOULDER DESIGNS Businesses including but not limited to current, former, and prospect client list and related information and not commonly known by or available to the public, including, without limitation, Trade Secrets, system standards and specifications, all information contained in the franchise manual, proprietary processing table with mailbox jig, texture mats and accessories, financial information, marketing data, vendor and supplier list, and all other knowledge and know-hows, and any other information identified as confidential when delivered by Franchisor. Confidential Information shall not include, however, any information established by documentary evidence that: (a) is now or subsequently becomes generally available to the public through no fault of Franchisee; (b) Franchisee can demonstrate was rightfully in its possession, without obligation of nondisclosure, prior to disclosure pursuant to this Agreement; (c) is independently developed without the use of any Confidential Information; or (d) is rightfully obtained from a third party who has the right, without obligation of nondisclosure, to transfer or disclose such information;
  • "Covered Person" means (i) the individual executing this Agreement as Franchisee; (ii) each Owner, officer, director, manager, trustee, or general partner and Internal Manager of Franchisee and each Franchisee Affiliate if Franchisee is a Business entity; and (iii) the spouse, adult children, parents, collaterals, or siblings of the individuals included in (i) and (ii). 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;

Source: Item 22 — CONTRACTS (FDD page 50)

What This Means (2025 FDD)

According to Boulder Designs' 2025 Franchise Disclosure Document, several actions can be considered unfair competition involving trade secrets and confidential information. The Franchise Agreement emphasizes the protection of Boulder Designs' proprietary information, preventing franchisees and related parties from engaging in activities that could undermine the brand's competitive advantage. This includes restrictions on involvement with any business offering similar products or services where Boulder Designs' trade secrets or confidential information could be used to the detriment of the franchisor or other franchisees.

The agreement specifically defines "Competitive Business" as any entity that offers engraved concrete signage or concrete landscaping products, or any similar products or services, where the franchisor's trade secrets or confidential information could be used to the disadvantage of Boulder Designs, its affiliates, or other franchisees. This definition is broad, covering not only direct competitors but also businesses where the misuse of confidential information could occur. However, it excludes businesses operated under a franchise agreement with Boulder Designs or publicly-held entities in which the franchisee owns less than a 5% interest.

Furthermore, the Franchise Agreement prohibits franchisees from disclosing confidential business information about the Boulder Designs system to former franchisees. This includes advertising materials, manuals, franchisee directories, customer lists, and any other non-public information about the Boulder Designs business. Franchisees are also restricted from referring prospective customers to former franchisees or assisting them in learning about franchisee meetings. These measures aim to prevent former franchisees from leveraging insider knowledge to compete unfairly against the Boulder Designs system.

In practical terms, a Boulder Designs franchisee must be vigilant in protecting the franchisor's trade secrets and confidential information. This includes ensuring that employees and related parties are aware of their obligations and refraining from any activity that could lead to the unauthorized disclosure or use of this information. Failure to comply with these restrictions could result in legal action and damage to the Boulder Designs brand.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.