What happens to a Boulder Designs franchise if the franchisee defaults?
Boulder_Designs Franchise · 2025 FDDAnswer 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 wh |
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, if a franchisee defaults, their interest in the franchise will terminate. Boulder Designs can terminate the franchise agreement if the franchisee fails to develop the Approved Location within 180 days after the Effective Date of the Franchise Agreement. Boulder Designs can also terminate the agreement if the franchisee fails to pay the Initial Franchise Fee or other amounts due within 10 days after receiving written notice.
Additional reasons for termination include failure to have the Internal Manager satisfactorily complete any training program, attempted or actual transfer of business in violation of the Franchise Agreement, or misuse of the Marks. These termination conditions are fairly standard in the franchise industry, as franchisors need to protect their brand and ensure franchisees are meeting their obligations.
It is important for a prospective Boulder Designs franchisee to understand the conditions under which the franchise can be terminated, as outlined in Sections 5.4, 5.5, and 16.2 of the Franchise Agreement. Franchisees should ensure they have a clear understanding of their obligations and the potential consequences of failing to meet them. This includes understanding the timeline for developing the Approved Location, payment terms, training requirements, and restrictions on transferring the business or misusing the trademarks.