Is a Boulder Designs franchisee's conviction of sexual harassment against an employee grounds for termination of the franchise?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in the | Summary | |
|---|---|---|---|
| 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 |
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, a franchisee's conviction of sexual harassment against an employee is grounds for termination of the franchise agreement. Specifically, Boulder Designs can terminate the franchise agreement if the franchisee, or their internal manager, is convicted of or pleads "no contest" to crimes including sexual harassment against an employee. This provision aims to protect the brand's reputation and ensure a safe and respectful work environment within all franchised locations.
This termination clause highlights the importance Boulder Designs places on ethical conduct and legal compliance among its franchisees. A conviction or plea of "no contest" to such a crime provides Boulder Designs with the right to terminate the agreement, which means the franchisee would lose their rights to operate under the Boulder Designs brand and system. This can have significant financial and operational consequences for the franchisee, including the loss of their initial investment and future revenue potential.
Prospective Boulder Designs franchisees should carefully consider this termination clause and understand the implications of any actions that could lead to such a conviction or plea. Maintaining a safe and legally compliant workplace is crucial not only for ethical reasons but also for the long-term viability of the franchise. Franchisees should implement robust policies and training programs to prevent harassment and ensure compliance with all applicable laws and regulations.