How are dealings between a Boulder Designs franchisee and a former Boulder Designs franchisee generally restricted?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee acknowledges that Former Franchisees are in a position to compete unfairly with Franchisor, Franchisee and/or other members of the System, and cause great injury to the reputation of the System and/or the Proprietary Marks. Franchisee therefore agrees as follows:
- i. Franchisee will not sell, loan, give or otherwise transfer or deliver to any Former Franchisee, or allow any Former Franchisee to copy or otherwise obtain, any confidential business information about the System; any advertising or promotional materials produced by Franchisor or which bear any of the Proprietary Marks; any other of our materials or publications, including, without limitation, the Manual; any directory or roster of franchisees or Approved Suppliers, any other customer lists or mailing lists pertaining in any way to the System; or any other information about the Boulder Designs Business or the System which is not available to the public;
- ii. Franchisee will not refer prospective Customers to any Former Franchisee;
- iii. Franchisee will not notify or advise any Former Franchisee of, or in any other way assist any Former Franchisee in learning about, the date, time and place of any meetings of franchisees;
- iv. If Franchisee observes any Former Franchisee using any of the Proprietary Marks in any way, or utilizing business premises or motor vehicles from which the Proprietary Marks and/or distinctive color scheme have not been completely obliterated, Franchisee shall immediately report such observation to Us, along with all details available to Franchisee;
- v. Franchisee shall, in general, have no dealings with a Former Franchisee which Franchisee, under this Agreement, could not have with a person who has never been a Boulder Designs Franchisee; and
- vi. The provisions of this Section 13.13 shall apply to Franchisee upon notice of the expiration or termination of another Franchisee's Franchise Agreement.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, a franchisee faces several restrictions in their dealings with former franchisees. Boulder Designs recognizes that former franchisees could potentially compete unfairly and harm the system's reputation. Therefore, the franchise agreement includes specific stipulations to prevent this.
Specifically, a current Boulder Designs franchisee is prohibited from selling, loaning, or transferring any confidential business information, advertising materials, or other proprietary materials to a former franchisee. This includes the operations manual, franchisee directories, customer lists, and any non-public information about the Boulder Designs business. Furthermore, franchisees cannot refer prospective customers to former franchisees or inform them about franchisee meetings. If a franchisee observes a former franchisee using Boulder Designs' proprietary marks or color schemes, they are obligated to report it to Boulder Designs.
In general, a Boulder Designs franchisee is expected to avoid any dealings with a former franchisee that they would not have with someone who had never been part of the Boulder Designs system. These restrictions apply as soon as a franchisee receives notice that another franchisee's agreement has expired or terminated. This aims to protect Boulder Designs' confidential information, customer base, and brand integrity by limiting interactions between current and former franchisees.