What protection does Boulder Designs provide to a franchisee regarding the use of trademarks in Minnesota?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
to grant any person or entity the right to act as Franchisee's agent to perform any part of Franchisee's rights or obligations herein.
Section 2.4 The Territory
If the Key Terms Page identifies the Territory as a "Separate Territory" then, provided Franchisee is not in default under any of the terms hereof, Franchisor will not grant anyone by Franchisee the right to operate a BOULDER DESIGNS Business in the Territory subject to reserved rights by Franchisor pursuant to this Section 2.4 of this Agreement.
If the Key Terms Page identifies the Territory as a "Shared Territory," then Franchisor may itself operate, or grant others the right to operate, one or more BOULDER DESIGNS Businesses in the Territory. If this Agreement initially grants a "Separate Territory," Franchisor has the right to convert the territory to a "Shared Territory," by delivering to Franchisee written notice of the change. A Separate Territory may be converted to a Shared Territory should the Franchisee fail to meet a minimum performance target or a minimum gross revenue requirement (which will not exceed $30,000 annually).
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, the level of trademark protection a franchisee receives depends on whether their territory is designated as a "Separate Territory" or a "Shared Territory." If designated as a "Separate Territory," and provided the franchisee is not in default, Boulder Designs will not grant anyone else the right to operate a Boulder Designs business within that territory. However, this protection is subject to rights reserved by Boulder Designs, as outlined in Section 2.4 of the Franchise Agreement. This means that even with a "Separate Territory," Boulder Designs retains certain rights that could impact the franchisee's exclusivity.
Regardless of whether the territory is "Separate" or "Shared," Boulder Designs explicitly retains the right to grant other franchisees the right to provide products and services under the Boulder Designs trademarks both inside and outside the franchisee's territory. Boulder Designs also reserves the right to establish, own, and operate other businesses under different systems and trademarks, both within and outside the franchisee's territory. Furthermore, Boulder Designs can acquire similar businesses, including their franchise or license agreements, which may operate anywhere, including within the franchisee's territory.
These provisions indicate that a Boulder Designs franchisee's protection regarding trademark use is limited. While a "Separate Territory" offers some exclusivity against other Boulder Designs franchises, Boulder Designs retains significant rights to operate or license other businesses, even those that might compete, within the same area. This is a common practice in franchising, where franchisors balance the need to provide franchisees with sufficient territory to operate profitably against the franchisor's desire to expand and explore different business models or channels of distribution. A prospective franchisee should carefully consider these limitations and discuss them with Boulder Designs to fully understand the potential impact on their business.