If litigation is initiated against Boulder Designs, in which judicial district must it be initiated and maintained?
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) |
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, any litigation must be initiated and maintained in the judicial district where Boulder Designs' principal place of business is located at the time the lawsuit is initiated, which is currently Waco, Texas. However, Boulder Designs retains the right to seek injunctive relief from any court that has the authority to grant it. This is subject to state law.
This clause means that if a franchisee has a dispute with Boulder Designs that leads to a lawsuit (excluding actions for injunctive relief), the franchisee will likely need to pursue that lawsuit in Waco, Texas, regardless of where the franchisee's business is located. This could increase the franchisee's legal costs due to travel and potentially hiring Texas-based attorneys.
It is important to note the phrase "subject to state law." Certain states may have franchise laws that override the franchise agreement's choice of forum provision, requiring disputes to be resolved in the franchisee's home state. For example, the addendum for Illinois states that any provision in the Franchise Agreement that designates venue outside of Illinois is void with respect to any cause of action that is otherwise enforceable in Illinois.
Prospective franchisees should be aware of this forum selection clause and understand its potential implications. They should also consult with an attorney to determine whether the clause is enforceable in their specific state, as state laws can vary and may provide certain protections for franchisees.