factual

Is a Boulder Designs franchisee's conviction of any theft charge grounds for termination of the franchise?

Boulder_Designs Franchise · 2025 FDD

Answer from 2025 FDD Document

Provision Section in the Summary
Franchise Agreement
a. Length of the franchise Section 4.1 10 years.
term
b. Renewal or extension of Section 4.2 Additional 10-year term if certain conditions
the term are met.
Provision Section in the Franchise Agreement Summary or modify their business relationship with Us, our Affiliate(s) or any other franchisee.
s. Modification of the Sections 9.2 and The Franchise Agreement can be modified
agreement 22.6 only by written agreement between you and us.
t. Integration/merger clause Section 22.6 Only the terms of the Franchise Agreement and all exhibits to the Franchise Agreement are binding (subject to state law). Any representations or promises made outside of the disclosure document and the Franchise Agreement may not be enforceable.
u. Dispute resolution by arbitration or mediation Section 23.7 Except for actions or claims for injunctive relief or specific performance or relating to the Marks, Trade Secrets or Confidential Information, all disputes must be mediated in McLennan County, Texas. (Subject to state law)
v. Choice of forum Section 23.2 Litigation must be initiated and maintained in the judicial district in which our principal place of business is located at the time the lawsuit was initiated, currently Waco, Texas. We have the right to seek injunctive relief from any court of competent jurisdiction. (Subject to state law)
w. Choice of law Section 23.1 Texas law applies (subject to state law), except that disputes over the Marks will be governed by the United States Trademark Act of 1946.
Section in the
Franchise
Summary
Agreement
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;

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 38–44)

What This Means (2025 FDD)

The 2025 Franchise Disclosure Document for Boulder Designs does not explicitly state that a franchisee's conviction of a theft charge is grounds for termination. However, Item 17 outlines various conditions under which the franchise agreement can be terminated. These include failure to develop the Approved Location within 180 days, failure to pay fees, misuse of trademarks, or any act that impairs the goodwill of the marks. Additionally, material misrepresentation or omission in the franchise application can lead to termination. While a theft conviction isn't directly mentioned, it could potentially fall under 'other act which impairs the goodwill of any of the Marks' or be considered a material misrepresentation depending on the circumstances.

Item 17 also includes state-specific addenda that could affect termination conditions. For example, the addendum for Illinois states that the conditions under which a franchise can be terminated may be affected by Illinois law. Similarly, the addendum for Indiana references the Indiana Deceptive Franchise Practices Act, which impacts non-compete agreements upon termination or failure to renew the franchise. These state laws could potentially influence whether a theft conviction is grounds for termination.

Given the lack of a direct statement regarding theft convictions, prospective Boulder Designs franchisees should seek clarification from the franchisor. Specifically, they should inquire about what types of actions or convictions would be considered detrimental to the brand's goodwill and therefore grounds for termination. It would also be prudent to consult with a legal professional to understand how state-specific franchise laws might apply to such a situation.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.
All Boulder_Designs 2025 FAQs Ask FDD Ninja