Must the Internal Manager for a Boulder Designs franchise have an equity interest in the franchise?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
The Franchised Business must always be under the direct supervision of your Internal Manager, who must devote their full-time, best efforts to the operation of the Franchised Business. Your Internal Manager need not have an equity interest in the franchise, but must satisfactorily complete our initial training program and must sign a Non-Disclosure Agreement and Non-competition Agreement substantially in the form attached as Exhibit 2 to the Franchise Agreement. We also recommend, but do not require, that an individual with an equity interest in the franchise personally participate in the business and supervise operations.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 37–38)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, the Internal Manager is not required to have an equity interest in the franchise. However, the Franchised Business must always be under the direct supervision of the Internal Manager, who must devote their full-time, best efforts to the operation.
While equity is not mandatory for the Internal Manager, they must still meet certain requirements. They must satisfactorily complete Boulder Designs' initial training program and sign both a Non-Disclosure Agreement and a Non-competition Agreement. Boulder Designs also recommends, but does not require, that an individual with an equity interest in the franchise personally participate in the business and supervise operations.
This provides flexibility for a Boulder Designs franchisee in structuring their business. They can hire a manager without offering equity, or they can choose to have an owner-operator model where someone with an equity stake is directly involved in the day-to-day operations. The key requirement is that the business is actively managed by a trained and dedicated individual.