Following termination or expiration of a Boulder Designs franchise, what is the geographic scope of the non-competition covenant, considering both the Approved Location and other Boulder Designs businesses?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
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| r. Non-competition covenants after the franchise is terminated or expires | Section 17.2 | For three years after the termination or expiration of the Franchise Agreement, you, your owners (and members of their families and collaterals) and your officers, directors, executives or managers are prohibited from: owning or working for a business that offers or sells engraved concrete signage or concrete landscaping products or other products or services that are similar to those sold by the Franchised Business within 25 miles of the Approved Location or within the Territory (whichever is greater), and within 25 miles of any other BOULDER DESIGNS Businesses; or soliciting or influencing any consumers, employees or business associates of ours, our Affiliate(s) or any other franchisee to terminate or modify their business relationship with Us, our Affiliate(s) or any other franchisee. |
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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, after the franchise agreement is terminated or expires, a franchisee, their owners (including family members), and their officers, directors, executives, or managers are subject to a non-competition covenant. This covenant restricts them from owning or working for a business that offers or sells engraved concrete signage, concrete landscaping products, or similar products and services.
The geographic scope of this restriction extends to 25 miles from the Approved Location or within the Territory, whichever is greater. Additionally, the non-compete applies within 25 miles of any other Boulder Designs businesses. This means that a former franchisee is restricted from operating a competing business not only near their former location but also near any other Boulder Designs franchise.
Furthermore, the non-competition covenant also prohibits the franchisee from soliciting or influencing any consumers, employees, or business associates of Boulder Designs, its affiliates, or any other franchisee to terminate or modify their business relationship with Boulder Designs. This restriction is in place for three years after the termination or expiration of the Franchise Agreement. It is important to note that the enforceability of non-competition covenants is subject to state law, which may impact the actual scope and enforcement of these provisions.