What pre-opening obligations must Boulder Designs fulfill before collecting the initial franchise fee in Washington?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
5.5.1 BY VIRTUE OF COMMENCING OPERATIONS OF YOUR BUSINESS, FRANCHISEE ACKNOWLEDGES THAT FRANCHISOR HAS FULFILLED ALL OF ITS OBLIGATIONS TO FRANCHISEE THAT FRANCHISOR IS REQUIRED TO FULFILL PRIOR TO THE OPENING OF YOUR BOULDER DESIGNS BUSINESS.
Section 8.1 Initial Training
Franchisor shall make its initial training programs and re-boot training available to the Franchisee and its Internal Manager.
Upon execution of this Agreement, Franchisee shall pay Franchisor an Initial Training Fee in the amount specified in Exhibit 1, Key Terms Page. The initial training program consists of approximately five business day(s) of classroom training and on-the-job initial training program for the Franchisee and its initial manager. Instruction pertains to all material aspects of the operation of a BOULDER DESIGNS Business, including such topics as: BOULDER DESIGNS mission and principles; establishment of your business structure; legal filings; business licenses; banking and checking accounts; insurance; accounting and legal support; computer system and software installation; set up accounting systems; market research; marketing plan; optional establishment of office lease; employment suggestions; incoming call scripts; office administration; administrative management training; trademark usage guidelines; maintenance of quality standards; customer service techniques; record keeping and reporting procedures; other operational issues; resale, transfer, renewals and assignment training; vendor interaction and ordering, and on-the-job training. Franchisor shall conduct the initial training program either in person at its headquarters or at another designated location or locations, as Franchisor requires. Initial Training amount is fully earned and nonrefundable upon completion of the Franchisee's training. If Franchisee does not successfully complete the initial training, Franchisor reserves the right to deduct any amount from Franchisee's Initial Training Fee to cover Franchisor's expense and the cost of providing the initial training course in addition to Franchisee paying Franchisor the On-Site Training Cancellation Fee and the other rights of Franchisor pursuant to this agreement.
Initial Training Fee is allocated to Franchisor's cost and expense in providing such training to the Franchisee and its initial manager; however, all expenses incurred by Franchisee and its employees in attending such program including, but not limited to, travel costs, room and board expenses and employees' salaries, shall be the sole responsibility of Franchisee. Additional trainees will be at the then-current published rates. Any additional individuals or new internal managers are subject to fees under Section 8.4 of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Section 5.5.1 states that Boulder Designs is considered to have fulfilled all pre-opening obligations to the franchisee once the franchisee commences operations. This implies that Boulder Designs does not have any specific pre-opening obligations that must be fulfilled before collecting the initial franchise fee. The franchisee's act of opening their Boulder Designs business serves as an acknowledgement that the franchisor has met all necessary requirements.
However, Section 8.1 indicates that upon execution of the agreement, the franchisee must pay Boulder Designs an initial training fee. The initial training program includes classroom and on-the-job training for the franchisee and their initial manager, covering various aspects of operating a Boulder Designs business. This training may be conducted at Boulder Designs' headquarters or another designated location. The initial training fee is nonrefundable upon completion of the training, and the franchisee is responsible for all expenses related to attending the training, such as travel, room and board, and salaries.
It is important for prospective franchisees to understand that by commencing operations, they are acknowledging that Boulder Designs has fulfilled all its pre-opening obligations. If a franchisee has concerns about the adequacy of pre-opening services, they must notify Boulder Designs in writing within thirty days following the opening of their business. Failure to do so will be deemed as conclusive acknowledgment that all required pre-opening services were sufficient and satisfactory. This places the onus on the franchisee to carefully assess and document any deficiencies in the pre-opening support provided by Boulder Designs.