Does the Boulder Designs franchisee's obligation to reimburse the franchisor for customer complaint settlements survive the termination or expiration of the Franchise Agreement?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee agrees to promptly address all complaints in accordance with the procedures contained in the Operations Manual or as otherwise provided by the Franchisor. If Franchisee is unable or unwilling to
resolve a customer complaint within forty-eight (48) hours, and it becomes necessary for us to reimburse a customer in settlement of his or her complaint about work performed at or by your Boulder Designs business, you agree to promptly reimburse us for amounts expended on account of any such complaint. Your obligations and liabilities under this Section shall survive any termination or expiration of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Boulder Designs's 2025 Franchise Disclosure Document, the franchisee's obligation to reimburse Boulder Designs for customer complaint settlements does indeed survive the termination or expiration of the Franchise Agreement. This means that even after the franchise agreement ends, whether through termination or expiration, the franchisee remains responsible for reimbursing Boulder Designs for any amounts Boulder Designs expended to settle customer complaints related to work performed by the franchisee's Boulder Designs business.
This survival clause has significant implications for a prospective Boulder Designs franchisee. It means that potential liabilities related to customer complaints can extend beyond the term of the franchise agreement. If a customer lodges a complaint about work done during the franchise term, even after the agreement has ended, the franchisee could still be liable for reimbursement if Boulder Designs settles the complaint. This could affect the franchisee's financial planning and potential sale of the business, as these liabilities would need to be considered.
In the franchise industry, it is common for certain obligations to survive the termination or expiration of the franchise agreement, particularly those related to post-term non-compete clauses, confidentiality, and payments owed. The survival of the customer complaint reimbursement obligation aligns with this practice, ensuring that Boulder Designs can protect its brand reputation and customer relationships even after a franchise agreement concludes. Franchisees should carefully consider this aspect and factor it into their risk assessment and business planning.
Prospective franchisees should seek clarification from Boulder Designs regarding the types of complaints that would trigger this reimbursement obligation, the process for settling such complaints, and any limitations on the amount or duration of this post-term liability. Understanding these details is crucial for making an informed decision about investing in a Boulder Designs franchise.