After the Boulder Designs franchise agreement is terminated or expires, is the franchisee allowed to operate a similar business?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
- 6.3 own, maintain, advise, operate, engage in, be employed by, make loans to, invest in, provide any assistance to, or have any interest in (as owner or otherwise) or relationship or association with, any business conducting landscape architecture or outdoor living construction services, other than another Boulder Designs franchise operated pursuant to a valid franchise agreement with Franchisor.
This restriction shall apply, while I am an Owner, to any location within the United States, its territories or commonwealths, or any other country, province, state or geographic area in which Franchisor or its Affiliates have used, sought registration of or registered the Marks or similar marks or operate or license others to operate a business under the Marks or similar marks.
It will apply for two years after I cease to be an Owner (or two years after termination or expiration of the Franchise Agreement, whichever occurs first) to any location that is, or is intended to be, located in the Territory (as defined in the Franchise Agreement) or market area of any other business operating under the Boulder Designs System and Marks.
If the two-year restrictive period would be unenforceable under applicable law as an unreasonable restraint of trade, then such restriction is modified to prohibit you and each Owner, as applicable, from soliciting or providing services, during said two-year period, to any client previously serviced by the Franchised Business.
This two-year restriction will be tolled during any period of my noncompliance.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, a franchisee is restricted from engaging in similar business activities after the franchise agreement ends. Specifically, for two years after ceasing to be an owner or after the termination/expiration of the Franchise Agreement (whichever occurs first), the franchisee cannot own, maintain, advise, operate, be employed by, make loans to, invest in, provide assistance to, or have any interest in any business conducting landscape architecture or outdoor living construction services. This restriction applies to any location within the defined territory or market area of another Boulder Designs business.
This post-term restriction is significant for prospective franchisees as it limits their ability to immediately leverage their experience and knowledge gained while operating a Boulder Designs franchise. The restriction is in place to protect Boulder Designs' market share and brand integrity by preventing former franchisees from directly competing and potentially diverting customers or utilizing confidential information. The agreement specifies that if the two-year restrictive period is deemed unenforceable under applicable law as an unreasonable restraint of trade, the restriction is modified to prohibit soliciting or providing services to clients previously serviced by the franchised business during the same two-year period.
It is important to note that this two-year restriction can be extended if the franchisee is non-compliant with the terms of the agreement, as the restriction period will be tolled during any period of noncompliance. This means any violation of the franchise agreement could prolong the time a former franchisee is unable to compete in a similar business. Prospective franchisees should carefully consider these limitations and how they might impact their future business endeavors after their franchise agreement with Boulder Designs concludes.
Furthermore, the FDD states that upon termination or expiration of the agreement, the franchisee must cease operating the franchised business, return all information including customer lists and marketing data, and discontinue using any confidential information, the system, and the marks associated with Boulder Designs. They must also take action to cancel or assign any assumed name registrations containing "Boulder Designs". These obligations collectively ensure a clean break and prevent any potential confusion or unfair competition after the franchise relationship ends.