What is the effect of noncompliance with the two-year restriction in the Boulder Designs Guaranty?

According to the 2025 Boulder Designs Franchise Disclosure Document, if an owner does not comply with the two-year restriction outlined in the Guaranty, the two-year restrictive period will be tolled during any period of noncompliance. This means that the clock on the two-year restriction pauses for as long as the owner is in violation, effectively extending the duration of the restriction.

This provision protects Boulder Designs by ensuring that former owners cannot immediately engage in competitive activities within the restricted territory or market area. By tolling the restriction during noncompliance, Boulder Designs prevents individuals from circumventing the non-compete agreement through temporary violations.

For a prospective Boulder Designs franchisee, this clause highlights the importance of adhering to the terms of the Guaranty, particularly the non-compete provisions. Noncompliance not only risks legal action by Boulder Designs but also extends the period during which the former owner is restricted from engaging in competitive activities. Franchisees should carefully review Article 23 of the Franchise Agreement, as it applies to disputes arising from the Guaranty.