Are Boulder Designs franchisees responsible for freight costs associated with equipment delivery?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company sells and delivers equipment purchased from third-party equipment manufacturers to U.S. based franchisee-owned stores. Revenue is recognized upon transfer of control of ordered items, generally upon delivery to the customer, which is
Notes to Financial Statements (Continued)
(1) Summary of Significant Accounting Policies (continued)
(i) Revenue Recognition (continued)
when the customer obtains physical possession of the goods, legal title is transferred, the customer has all risks and rewards of ownership and an obligation to pay for the goods is created. Franchisees are charged for all freight costs incurred for the delivery of equipment. Freight revenue is recorded within equipment revenue and freight costs are recorded within cost of equipment and supplies.
Source: Item 23 — RECEIPT (FDD pages 50–217)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, franchisees are responsible for freight costs associated with the delivery of equipment. Boulder Designs sells and delivers equipment purchased from third-party equipment manufacturers to franchisee-owned stores within the U.S. Revenue is recognized when the customer takes possession of the goods and legal title is transferred. At this point, the customer has all risks and rewards of ownership and is obligated to pay for the goods.
This means that as a Boulder Designs franchisee, you will be charged for the freight costs incurred to deliver the equipment necessary to operate your franchise. These freight revenue costs are recorded within equipment revenue, while the corresponding freight costs are recorded within the cost of equipment and supplies.
This is a fairly standard practice in franchising, where the franchisee typically bears the cost of shipping and handling for equipment and supplies. Prospective Boulder Designs franchisees should factor in these freight costs when estimating their initial investment and ongoing operational expenses.