Does Boulder Designs grant an exclusive territory to its franchisees?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
You will not receive an exclusive territory. You may face competition from other franchisees, from businesses that we own, or from other channels of distribution or competitive brands that we control. You will operate the Franchised Business from an approved location within a defined geographic area (the "Territory"), which will have a minimum population of 225,000. The geographic area is typically defined by county. You may relocate the physical location of business to another location within the Territory with our prior written consent.
We currently offer two types of territories: a "Separate Territory" or a "Shared Territory." If you acquire franchise rights for a Separate Territory, then so long as you are in compliance with your obligations under the Franchise Agreement, we will not grant anyone but you the right to operate a Boulder Designs Business within your territory, subject to our reserved rights below. If you acquire franchise rights for a Shared Territory, then we may grant two or more franchisees the right to operate Boulder Designs Businesses within a larger Territory, such as a metroplex or designated marketing area. Boulder Designs reserves the right to reduce Shared Territory rights proportional to the population of the larger Territory.
Your Franchised Business' activities are confined to retail transactions only. You may not enter into any wholesale transactions without first obtaining our written consent. A "wholesale" transaction means any sale of five or more products or services (regardless of stage of completion) to a customer whose purpose is to, in turn, offer such products or services for resale to a third-party. Sale of products includes sale of
Source: Item 12 — TERRITORY (FDD pages 32–34)
What This Means (2025 FDD)
According to Boulder Designs's 2025 Franchise Disclosure Document, franchisees do not automatically receive an exclusive territory. Instead, Boulder Designs offers two types of territories: Separate and Shared. If a franchisee obtains a Separate Territory, Boulder Designs will not grant another franchisee the right to operate a Boulder Designs business in that territory, provided the franchisee remains compliant with the Franchise Agreement and subject to Boulder Designs' reserved rights. However, Boulder Designs reserves the right to operate or grant others the right to operate similar or competing businesses under a different trademark within the franchisee's territory. They also retain the right to distribute products and services under the Boulder Designs trademark through alternative channels, such as online sales, without compensating the franchisee.
Even with a designated territory, Boulder Designs retains significant rights that could impact a franchisee's business. Boulder Designs can establish National Accounts within a franchisee's territory, requiring the franchisee to service these accounts under negotiated terms. If Boulder Designs deems the franchisee incapable of handling a National Account, they can authorize other franchisees or third parties to provide services without compensating the original franchisee. Furthermore, franchisees are restricted from wholesale transactions without prior written consent and from soliciting or advertising outside their territory without approval.
The document also states that Boulder Designs can implement a Minimum Gross Revenue requirement with 30 days' notice, which they anticipate will not exceed $30,000 annually. Failure to meet this requirement may lead to mandatory re-boot training at the franchisee's expense, and continued failure can result in termination of the Franchise Agreement. Additionally, Boulder Designs reserves the right to convert a Separate Territory into a Shared Territory if a franchisee fails to meet performance targets or minimum gross revenue requirements, creating a larger territory with a population greater than 450,000.
While franchisees can accept orders from outside their territory under certain conditions, restrictions apply. For instance, if a product retails over $2,000 and the territory is not owned by another franchisee, 100% of the retail price must be paid to Boulder Designs. If the area is within another franchisee's territory, the franchisee must pay an Encroachment Fee of $1,000 per job and remit 100% of the revenue to the other franchisee. These conditions highlight the importance of understanding the territorial agreements and potential limitations when considering a Boulder Designs franchise.