What is the definition of 'Territory' in relation to the Boulder Designs non-compete clause?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
It will apply for two years after I cease to be an Owner (or two years after termination or expiration of the Franchise Agreement, whichever occurs first) to any location that is, or is intended to be, located in the Territory (as defined in the Franchise Agreement) or market area of any other business operating under the Boulder Designs System and Marks.
If the Key Terms Page identifies the Territory as a "Shared Territory," then Franchisor may itself operate, or grant others the right to operate, one or more BOULDER DESIGNS Businesses in the Territory. If this Agreement initially grants a "Separate Territory," Franchisor has the right to convert the territory to a "Shared Territory," by delivering to Franchisee written notice of the change. A Separate Territory may be converted to a Shared Territory should the Franchisee fail to meet a minimum performance target or a minimum gross revenue requirement (which will not exceed $30,000 annually). If the Territory is converted to a Shared Territory we anticipate the Shared Territory will consist of a population of greater than 450,000.
Franchisee's business activities are confined to retail transactions only. Franchisee may not enter into any Wholesale Transactions in Franchisee's Territory without first obtaining Franchisor's written consent. Franchisee acknowledges and agrees that conducting Wholesale Transactions without Franchisor's prior approval is a material breach of this Franchise Agreement, for which Franchisor may terminate the Franchise Agreement for cause without an opportunity to cure. Whether retail or wholesale, Franchisee may not offer or sell products or services outside of the Territory without prior written approval from
Franchisor, and Franchisor may revoke its permission at any time at its sole discretion with 10 days' written notice to Franchisee. If any Wholesale Transactions interferes with National Accounts, Franchisee must immediately cease those Whole Transactions upon Franchisor's written notice. Franchisee shall use best efforts to maximize sales within the Territory, and Franchisee may not directly or indirectly solicit or advertise outside of the Territory, including on the Internet, without Franchisor's prior written consent. Franchisee shall only sell such customized Boulder Designs products within the Territory. Franchisee may participate in trade shows but such shows are confined to the Territory unless prior written approval has been provided by Franchisor. Franchisee may only sell items at such trade shows that Franchisor specifies and approves.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, the definition of 'Territory' is relevant to the non-compete clause a franchisee agrees to. After ceasing to be an owner, the non-compete clause applies for two years to any location that is, or is intended to be, located in the Territory as defined in the Franchise Agreement. This also includes the market area of any other business operating under the Boulder Designs System and Marks.
The Boulder Designs FDD also states that if the Key Terms Page identifies the Territory as a "Shared Territory," then Boulder Designs may itself operate, or grant others the right to operate, one or more Boulder Designs Businesses in the Territory. Boulder Designs has the right to convert a Separate Territory to a Shared Territory if the Franchisee fails to meet a minimum performance target or a minimum gross revenue requirement (which will not exceed $30,000 annually). If the Territory is converted to a Shared Territory, the Shared Territory will consist of a population of greater than 450,000.
Furthermore, the Boulder Designs franchisee's business activities are confined to retail transactions only. The franchisee may not offer or sell products or services outside of the Territory without prior written approval from Boulder Designs, and Boulder Designs may revoke its permission at any time at its sole discretion with 10 days' written notice to the franchisee. The franchisee shall use best efforts to maximize sales within the Territory, and the franchisee may not directly or indirectly solicit or advertise outside of the Territory, including on the Internet, without Boulder Designs' prior written consent. The franchisee shall only sell such customized Boulder Designs products within the Territory and may participate in trade shows confined to the Territory unless prior written approval has been provided by Boulder Designs.