What is the relationship between the initial franchise fee for Boulder Designs (Item 5) and the franchisee's potential earnings, considering the estimated initial investment (Item 7) and ongoing fees (Item 6)?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
IAL FEES**
When you sign the franchise agreement, you will pay us a $63,000 initial franchise fee for a single Boulder Designs franchise, which is uniformly imposed and fully earned and nonrefundable upon payment.
The initial franchise fee for the purchase of two Boulder Designs franchises at the same time is $110,000 ($55,000 *2). The initial franchise fee for any subsequent Boulder Designs franchise is $55,000.
Equipment and Supplies Package
When you sign the franchise agreement, you will also pay us $57,250 to purchase a processor machine, trailer, necessary equipment, marketing, electric 12 cubic foot hydraulic stationary mixer, and initial supplies. This amount is fully earned and nonrefundable upon payment. Any upgrades and related costs must be paid before signing the franchise agreement.
The purchase price does not include shipping costs, which are your responsibility.
We may, at our discretion, finance up to 50% of the equipment and supplies package if it is new equipment or up to 75% if it is used or refurbished equipment. See Item 10 for more details.
If you are purchasing two franchises at the same time, you only need to initially purchase one equipment and supplies package to service both franchises until such time as volume necessitates the need to purchase a second equipment and supplies package.
What This Means (2025 FDD)
According to Boulder Designs's 2025 Franchise Disclosure Document, the initial franchise fee for a single franchise is $63,000, which is nonrefundable upon payment. For franchisees purchasing two franchises simultaneously, the initial fee is $110,000, effectively $55,000 per franchise. Subsequent franchises are also $55,000 each. In addition to the franchise fee, franchisees must pay $57,250 for an equipment and supplies package, also nonrefundable upon payment. A $12,000 initial training fee covers the franchisee and an internal manager, and is nonrefundable after training completion.
Item 7 outlines the estimated initial investment, but it does not provide a total estimated cost. Instead, it breaks down the costs into categories such as truck payments, computer systems, and working capital. These costs, combined with the initial fees, represent the franchisee's total initial investment. Item 7 also mentions the possibility of financing up to 50% of new equipment or 75% of used equipment, which could ease the initial financial burden.
The FDD excerpts provided do not contain information regarding potential earnings or ongoing fees (Item 6). Therefore, it is not possible to fully assess the relationship between the initial franchise fee and a franchisee's potential earnings. A prospective franchisee should carefully review Item 6 of the FDD, which details ongoing fees such as royalties, technology fees, and advertising fees, and compare these to any earnings claims or projections provided by Boulder Designs to understand the potential profitability of the franchise relative to the initial investment.