factual

What financial conditions, such as bankruptcy or insolvency, can lead to termination of the Boulder Designs Franchise Agreement?

Boulder_Designs Franchise · 2025 FDD

Answer from 2025 FDD Document

Provision Section in the Summary
Franchise Agreement
a. Length of the franchise Section 4.1 10 years.
term
b. Renewal or extension of Section 4.2 Additional 10-year term if certain conditions
the term are met.
Provision Section in the Franchise Agreement Summary or modify their business relationship with Us, our Affiliate(s) or any other franchisee.
s. Modification of the Sections 9.2 and The Franchise Agreement can be modified
agreement 22.6 only by written agreement between you and us.
t. Integration/merger clause Section 22.6 Only the terms of the Franchise Agreement and all exhibits to the Franchise Agreement are binding (subject to state law). Any representations or promises made outside of the disclosure document and the Franchise Agreement may not be enforceable.
u. Dispute resolution by arbitration or mediation Section 23.7 Except for actions or claims for injunctive relief or specific performance or relating to the Marks, Trade Secrets or Confidential Information, all disputes must be mediated in McLennan County, Texas. (Subject to state law)
v. Choice of forum Section 23.2 Litigation must be initiated and maintained in the judicial district in which our principal place of business is located at the time the lawsuit was initiated, currently Waco, Texas. We have the right to seek injunctive relief from any court of competent jurisdiction. (Subject to state law)
w. Choice of law Section 23.1 Texas law applies (subject to state law), except that disputes over the Marks will be governed by the United States Trademark Act of 1946.
Section in the
Franchise
Summary
Agreement
Agreement following a default, your interest in
the franchise will terminate.
5.4, 5.5.
We can terminate if you fail to develop the
and 16.2
Approved Location within 180 days after the
Effective Date of the Franchise Agreement. We
also can terminate for failure to pay the Initial
Franchise Fee or other amounts due within 10
days after receiving written notice; failure to
have your Internal Manager satisfactorily
complete any training program; attempted or
actual transfer of business in violation of the
Franchise Agreement; misuse of the Marks, or
other act which impairs the goodwill of any of
the Marks; material misrepresentation or
omission in your franchise application; are
conviction or "no contest" plea to a crime or
offense that would place them on the sex
offenders registry, was a violent felony, crimes
against a human, sexual harassment against an
employee, domestic abuse charges, animal
abuse, elderly abuse, substance abuse, DWI or
DUI, any theft charge or is likely to affect the
reputation of either party or the Franchised
Business;

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 38–44)

What This Means (2025 FDD)

According to Boulder Designs' 2025 Franchise Disclosure Document, being adjudicated bankrupt, insolvent, or making a general assignment for the benefit of creditors can lead to the termination of the Franchise Agreement. Additionally, failure to pay any fees due to Boulder Designs or any of its affiliates can also result in termination.

This means that if a Boulder Designs franchisee faces severe financial difficulties leading to bankruptcy or an inability to pay their debts, Boulder Designs has the right to terminate the franchise agreement. This is a fairly standard clause in franchise agreements, designed to protect the franchisor's brand and reputation from the negative impacts of a franchisee's financial distress.

It is important for prospective Boulder Designs franchisees to understand the financial obligations and potential risks associated with the franchise. Maintaining a healthy financial standing is crucial to avoid triggering the termination clause related to bankruptcy, insolvency, or failure to pay fees. Franchisees should carefully review the terms of the Franchise Agreement and seek professional financial advice to ensure they can meet their financial obligations and manage their business effectively.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.
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