Does the definition of 'Covered Person' for a Boulder Designs franchise include adult children of the franchisee?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
- "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).
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, the definition of "Covered Person" does include the adult children of the franchisee. Specifically, the FDD states that a "Covered Person" includes not only the individual franchisee and certain individuals associated with the franchisee if it is a business entity, but also the spouse, adult children, parents, collaterals, or siblings of those individuals.
This definition is important because it extends certain obligations and restrictions outlined in the franchise agreement beyond just the franchisee. For example, "Covered Persons" are restricted from holding an interest in or performing services for any Competitive Business during the term of the agreement. This means that the franchisee's adult children are also restricted from being involved with a competing business.
Prospective Boulder Designs franchisees should carefully consider the implications of this broad definition, as it could impact the activities and employment options of their adult children and other family members. It is important to discuss these restrictions with family members before entering into a franchise agreement to ensure everyone understands and is willing to comply with the terms.