What is the impact on the two-year restriction period if a Boulder Designs owner is found to be in noncompliance?

According to Boulder Designs' 2025 Franchise Disclosure Document, if a franchisee is found to be in noncompliance with the franchise agreement, the two-year restriction period after they cease to be an owner will be paused for the duration of the noncompliance. This means the clock on the non-compete period stops running while the franchisee is in violation of the agreement.

This tolling provision is significant because it effectively extends the period during which the former franchisee is restricted from competing with Boulder Designs. For example, if a franchisee violates the agreement for six months, the two-year restriction period will be extended by those six months, resulting in a total restriction period of two years and six months.

This clause protects Boulder Designs by ensuring that franchisees cannot benefit from violating the agreement and then immediately compete after a shortened restriction period. It also incentivizes franchisees to remain in compliance to avoid prolonging the time they are subject to the non-compete provisions. Prospective franchisees should understand this provision and its potential impact on their future business activities should they decide to leave the Boulder Designs system.