What did Mr. and Mrs. Sanford pay Boulder Designs as part of the settlement agreement?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
rets.
Boulder v Sanford and Red Art (Case No. No. 21-0846-C26), in the District Court of McLennan County, Texas, filed on June 14, 2021. Boulder filed a lawsuit claiming breaches of contract against one of its franchisees, Mr. and Mrs. Sanford, and a third-party affiliated with the franchisee for disclosing its trade secrets and confidential information in violation of the agreements of the parties. On June 16, 2021, a temporary restraining order was issued against all defendants to protect Boulders trade secrets and confidential information. On December 20, 2021, Boulder reached a confidential settlement agreement with Mr. and Mr. Sanford to terminate their franchise agreement and cease use of the Boulder trademarks and trade secrets and Mr. and Mrs. Sanford paid a termination fee of $6,624.00. On March 23, 2022, Boulder reached a confidential settlement agreement with Red Art where Red Art agreed not to use or disclose confidential information or trade secrets in violation of any agreement between the pa
Source: Item 3 — LITIGATION (FDD pages 9–10)
What This Means (2025 FDD)
According to Boulder Designs's 2025 Franchise Disclosure Document, Mr. and Mrs. Sanford, a former franchisee, paid Boulder Designs a termination fee of $6,624.00 as part of a confidential settlement agreement reached on December 20, 2021. This agreement terminated their franchise agreement and required them to cease using Boulder Designs' trademarks and trade secrets. The lawsuit leading to this settlement was initiated by Boulder Designs on June 14, 2021, alleging breaches of contract related to the disclosure of trade secrets and confidential information.
This type of settlement is not uncommon in franchising when disputes arise between the franchisor and a franchisee. The settlement allowed Boulder Designs to protect its intellectual property and terminate a relationship with a franchisee who allegedly violated the franchise agreement. For prospective franchisees, this highlights the importance of adhering to the terms of the franchise agreement, particularly those related to confidentiality and the use of trademarks and trade secrets.
The fact that Boulder Designs pursued legal action and reached a settlement with a franchisee indicates the company's commitment to protecting its brand and proprietary information. It also demonstrates the potential financial consequences for franchisees who violate the terms of their agreement. Prospective franchisees should carefully review the franchise agreement and understand their obligations to avoid similar disputes.