What is the Boulder Designs franchisee required to do prior to any change in ownership interests?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
Before opening the Franchised Business and commencing business, Franchisee must:
- vii. if Franchisee is a business entity, Franchisee has caused each of its stock certificates or other ownership interest certificates to be conspicuously endorsed upon the face thereof a statement in a form satisfactory to Franchisor that such ownership interest is held subject to, and that further assignment or transfer thereof is subject to, all restrictions imposed upon transfers and assignments by this Agreement; and
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to the 2025 Boulder Designs Franchise Disclosure Document, if the franchisee is a business entity, they must ensure that each stock certificate or ownership interest certificate is conspicuously endorsed with a statement, in a form satisfactory to Boulder Designs, indicating that the ownership interest is subject to all transfer restrictions outlined in the Franchise Agreement. This requirement is part of the conditions that must be met before opening the franchised business.
This stipulation ensures that any potential future owners are fully aware of the limitations and obligations associated with the franchise. By having the ownership interest certificates clearly marked, Boulder Designs aims to maintain control over who becomes a franchisee and to prevent unauthorized transfers that could compromise the brand or system standards.
For a prospective Boulder Designs franchisee, this means that if they operate their franchise through a corporation, LLC, or other business entity, they must take extra care to properly document and restrict the transfer of ownership interests. Failure to comply with this requirement could potentially lead to issues with Boulder Designs and might even be grounds for termination of the franchise agreement. It is essential to consult with legal counsel to ensure full compliance with this provision.