Can Boulder Designs elect to assume the defense of any action against a franchisee?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
Without limiting the foregoing, in the event of any default by Tenant, Landlord shall give Franchisor written notice of such default.
If Tenant has failed to cure such default at the expiration of the applicable cure period, Landlord shall give Franchisor further written notice of such failure ("Franchisor Notice").
Following Franchisor's receipt of the Franchisor Notice, Franchisor shall have the right (but not the obligation) to cure Tenant's default before Landlord shall exercise any of Landlord's remedies arising as a consequence of Tenant's default.
Any such cure shall be effected within 15 days following Franchisor's receipt of the Franchisor Notice.
Such cure by Franchisor shall not be deemed to be an election to assume the terms, covenants, obligations, and conditions of the Lease.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, in the event that a Boulder Designs franchisee defaults on their lease agreement, the landlord is required to provide written notice of the default to Boulder Designs. Following the receipt of this notice, Boulder Designs has the right, but not the obligation, to cure the franchisee's default before the landlord exercises any remedies. This cure must be effected within 15 days of Boulder Designs receiving the notice.
This clause in the lease agreement provides a safety net for franchisees, as Boulder Designs has the option to step in and resolve the default, potentially preventing eviction or other legal actions by the landlord. However, it is important to note that Boulder Designs is not obligated to cure the default, and the decision to do so is at their discretion.
Furthermore, the FDD states that any action taken by Boulder Designs to cure a default does not constitute an assumption of the lease terms, covenants, obligations, and conditions. This means that while Boulder Designs may choose to resolve a specific default, they are not taking on the full responsibilities of the lease agreement. This arrangement protects Boulder Designs from being held liable for the entire lease, while still allowing them to support their franchisees in certain situations.
While the FDD discusses Boulder Designs' option to cure a franchisee's lease default, it does not explicitly state whether Boulder Designs can elect to assume the defense of any other legal action against a franchisee. A prospective franchisee should seek clarification from Boulder Designs regarding their policies on legal defense and support in various scenarios.