What constitutes a 'wholesale' transaction for a Boulder Designs franchise?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
Your Franchised Business' activities are confined to retail transactions only. You may not enter into any wholesale transactions without first obtaining our written consent. A "wholesale" transaction means any sale of five or more products or services (regardless of stage of completion) to a customer whose purpose is to, in turn, offer such products or services for resale to a third-party. Sale of products includes sale of
unfinished or raw boulders to wholesale customers. Conducting wholesale transactions without our prior written approval is a material breach of the franchise agreement, for which we may terminate the franchise agreement without an opportunity to cure.
Source: Item 12 — TERRITORY (FDD pages 32–34)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, a "wholesale" transaction is defined as the sale of five or more products or services, regardless of their stage of completion, to a customer who intends to resell these products or services to a third party. This includes the sale of unfinished or raw boulders to wholesale customers.
For a prospective Boulder Designs franchisee, this definition is crucial because franchisees are generally restricted to retail transactions. Engaging in wholesale transactions without obtaining prior written consent from Boulder Designs constitutes a material breach of the franchise agreement, potentially leading to termination of the agreement without an opportunity to rectify the breach.
Furthermore, the FDD stipulates that whether sales are retail or wholesale, franchisees cannot offer or sell products or services outside their designated territory without prior written approval from Boulder Designs. This restriction is in place to protect the territories of other franchisees and national accounts. If a franchisee's wholesale activities interfere with national accounts, they must immediately cease offering those products and services upon request from Boulder Designs. These stipulations highlight the importance of adhering to the franchisor's guidelines regarding sales activities and territorial restrictions to avoid potential penalties and maintain a good standing with the Boulder Designs franchise system.