What remedies does Boulder Designs have if a franchisee defaults under the franchise agreement?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
Should Franchisee fail to begin operating the Franchised Business within 180 days after the Effective Date, Franchisor has the right to terminate this Agreement with no refund to Franchisee of any amounts if Franchisee fails to cure such default within a thirty (30) day period.
Without limiting the foregoing, in the event of any default by Tenant, Landlord shall give Franchisor written notice of such default.
If Tenant has failed to cure such default at the expiration of the applicable cure period, Landlord shall give Franchisor further written notice of such failure ("Franchisor Notice").
Following Franchisor's receipt of the Franchisor Notice, Franchisor shall have the right (but not the obligation) to cure Tenant's default before Landlord shall exercise any of Landlord's remedies arising as a consequence of Tenant's default.
Any such cure shall be effected within 15 days following Franchisor's receipt of the Franchisor Notice.
Such cure by Franchisor shall not be deemed to be an election to assume the terms, covenants, obligations, and conditions of the Lease.
If Franchisor cures Tenant's default, or if Franchisor notifies Landlord that the Franchise Agreement has been terminated (which termination shall constitute a non-curable default pursuant to the Lease upon Landlord's receipt of Franchisor's notice thereof), Landlord agrees, upon Franchisor's written request, to assign to Franchisor any and all rights that Landlord may have under the Lease to remove and evict Tenant from the Premises and shall cooperate with Franchisor in order to pursue such action to a conclusion.
Franchisor has the right to terminate this Agreement for violation of this Section.
Franchisee shall, in all dealings with the customers, suppliers, Franchisor and the public, adhere to the highest standards of honesty, integrity, fair dealing and ethical conduct. Franchisee agrees to refrain from any business or advertising practice which may be injurious to Franchisor's business and the goodwill associated with the Proprietary Marks and other Boulder Designs Businesses. Franchisee and Franchisee's employees shall be required to adhere to all aspects of this Section. Failure to adhere to this section shall result in a default of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, if a franchisee fails to begin operating the franchised business within 180 days after the effective date of the agreement, Boulder Designs has the right to terminate the agreement. However, the franchisee has a 30-day period to correct this failure. If the franchisee does not fix the failure within the 30-day period, Boulder Designs can terminate the agreement without refunding any amounts to the franchisee.
Additionally, if the franchisee's business location is leased, Boulder Designs has certain rights if the franchisee defaults on the lease. The landlord must provide Boulder Designs with copies of any notices of default sent to the franchisee. Boulder Designs then has the option, but not the obligation, to cure the franchisee's default within 15 days of receiving notice from the landlord. Curing the default does not mean that Boulder Designs assumes the lease.
If Boulder Designs cures the franchisee's default or terminates the franchise agreement, the landlord must assign to Boulder Designs the right to evict the franchisee from the premises, and cooperate with Boulder Designs in pursuing such action. Boulder Designs then has the option to perform the lease terms on behalf of the franchisee for up to six months or assume the lease entirely. This provides Boulder Designs with flexibility in maintaining the location for a new franchisee or other business purposes. Boulder Designs also retains the right to resolve customer complaints and charge the franchisee for the costs incurred in doing so, and can terminate the agreement if the franchisee fails to adhere to standards of customer service and ethical conduct.