Is a Boulder Designs franchisee's conviction of substance abuse grounds for termination of the franchise?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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 | | | | | DUI, any theft charge or is likely to affect the | | | | | reputation of either party or the Franchised | | | | | Business; disclose, duplicate,
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 substance abuse can be grounds for termination of the franchise agreement. Specifically, if a franchisee is convicted of or pleads "no contest" to a crime or offense that includes substance abuse, Boulder Designs has the right to terminate the agreement. This also applies to convictions or pleas related to DWI or DUI.
This provision in the franchise agreement is significant because it gives Boulder Designs the power to terminate the agreement if a franchisee's actions, specifically those related to substance abuse, could potentially harm the reputation of the franchise. This is a fairly standard clause in franchise agreements, as franchisors want to protect their brand image and avoid negative publicity.
For a prospective Boulder Designs franchisee, this means that maintaining a clean criminal record is essential. Any conviction or "no contest" plea related to substance abuse, DWI, or DUI could jeopardize their franchise ownership. It is important to note that the determination of whether a crime is likely to affect the reputation of either party or the Franchised Business is at the discretion of Boulder Designs.