What is the effect of this agreement on Section 3.1 of the Boulder Designs Franchise Agreement?

According to the 2025 Boulder Designs Franchise Disclosure Document, an amendment to the franchise agreement addresses Section 3.1, which pertains to the initial franchise fee. The amendment stipulates that the payment of the initial franchise fee will be deferred. This deferral is contingent upon Boulder Designs, as the franchisor, fulfilling its initial obligations to the franchisee. The franchisee will not be required to pay the initial franchise fee until these obligations are met.

This amendment offers a significant benefit to prospective Boulder Designs franchisees. By deferring the initial franchise fee, it reduces the upfront financial burden on the franchisee. This can be particularly helpful for new franchisees who may be facing other startup costs. It also aligns the franchisor's interests with the franchisee's, as Boulder Designs is incentivized to promptly fulfill its obligations to the franchisee to trigger the payment of the fee.

In the franchise industry, it is not uncommon for franchisors to offer some form of financing or deferred payment options for the initial franchise fee. This amendment to Section 3.1 provides a specific and transparent mechanism for deferring the fee based on the franchisor's performance. Prospective franchisees should carefully review the franchise agreement and any amendments to fully understand the terms and conditions of the initial franchise fee payment and the franchisor's obligations that trigger the payment.