How does Boulder Designs determine the cost of equipment included in inventory?

According to Boulder Designs' 2025 Franchise Disclosure Document, the company determines the cost of equipment included in inventory using the specific cost method. Inventory for Boulder Designs consists of equipment, promotional apparel, and supplies that are sold to franchisees and is stated at the lower of cost or net realizable value. The cost of promotional apparel and supplies is based on the average cost, determined on a rolling average basis.

This means that Boulder Designs tracks the actual cost of each piece of equipment it sells to franchisees. This is a common accounting practice for higher-value items where tracking individual costs is feasible. For lower-value items like promotional apparel and supplies, Boulder Designs uses a rolling average cost, which smooths out fluctuations in price over time.

For a prospective Boulder Designs franchisee, this information is relevant for understanding how the cost of goods sold to them is calculated. Knowing that equipment costs are determined using the specific cost method provides transparency, as the franchisee can expect the cost to reflect the actual price Boulder Designs paid for that particular item. The use of a rolling average for apparel and supplies is also a standard practice that helps to stabilize pricing.