Are Boulder Designs franchisees allowed to own an interest in a Competitive Business?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
writing by Franchisor, neither Franchisee, nor any Covered Person shall, for a period of three years after the expiration or termination of this Agreement, regardless of the cause of termination, either directly or indirectly, for themselves or through, on behalf of or in conjunction with, any person, persons, partnership, corporation, limited liability company or other business entity:
- i. own an interest in, manage, operate or provide services to any Competitive Business located or operating (a) within 25 miles of the Approved Location or within the Territory (whichever is greater), and (b) within 25 miles of the location of any other BOULDER DESIGNS Business in existence at the time of termination or expiration; or
- ii. solicit or otherwise attempt to induce or influence any customer, employee or other business associate of Franchisor, its Affiliate(s) or any other franchisee to terminate or modify his, her or its business relationship with Franchisor, its Affiliate(s) or any other franchisee, by direct or indirect inducement or otherwise.
In furtherance of this Section, Franchisor has the right to require officers, managers, and partners along with certain individuals and any Covered Person to execute a standard form non-disclosure or noncompetition agreements in a form the same as the Non-Disclosure and Non-Competition Agreement attached as Exhibit 2.
Section 17.3 Unfair Competition
If Franchisee operates any other business, Franchisee shall not use any reproduction, counterfeit, copy or colorable imitation of the Marks, either in connection with such other business or the promotion thereof, that is likely to cause confusion, mistake or deception, or that is likely to dilute Franchisor's rights in the Marks. Franchisee shall not utilize any designation of origin, description or representation that falsely suggests or represents an association or connection with Franchisor.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, franchisees face restrictions on owning interests in competitive businesses. Specifically, a franchisee cannot own an interest in, manage, operate, or provide services to any Competitive Business located or operating within 25 miles of the Approved Location or within the Territory, whichever is greater. This restriction also applies within 25 miles of any other existing Boulder Designs Business at the time of termination or expiration of the franchise agreement.
This non-compete clause is further reinforced by the potential requirement for officers, managers, partners, and certain other individuals to sign non-disclosure and non-competition agreements. These agreements are in a standard form, as detailed in Exhibit 2 of the FDD. Moreover, if a Boulder Designs franchisee operates any other business, they are prohibited from using any reproductions or imitations of the Boulder Designs' Marks that could cause confusion or dilute the franchisor's rights in those Marks.
These restrictions extend beyond the active term of the franchise agreement. The FDD states that for two years after ceasing to be an Owner, or two years after termination or expiration of the Franchise Agreement (whichever occurs first), the franchisee is restricted from engaging in competitive activities within the Territory or market area of any other business operating under the Boulder Designs System and Marks. This post-term restriction can be modified under applicable law to prohibit soliciting or providing services to any client previously serviced by the Franchised Business during the two-year period if the original restriction is deemed unenforceable as an unreasonable restraint of trade.