Are representations or promises made outside of the Boulder Designs disclosure document and Franchise Agreement enforceable?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in the | Summary | |
|---|---|---|---|
| Franchise Agreement | |||
| a. Length of the franchise | Section 4.1 | 10 years. | |
| term | |||
| b. Renewal or extension of | Section 4.2 | Additional 10-year term if certain conditions | |
| the term | are met. | ||
| Provision | Section in the Franchise Agreement | Summary or modify their business relationship with Us, our Affiliate(s) or any other franchisee. | |
| s. Modification of the | Sections 9.2 and | The Franchise Agreement can be modified | |
| agreement | 22.6 | only by written agreement between you and us. | |
| t. Integration/merger clause | Section 22.6 | Only the terms of the Franchise Agreement and all exhibits to the Franchise Agreement are binding (subject to state law). Any representations or promises made outside of the disclosure document and the Franchise Agreement may not be enforceable. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 38–44)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, the enforceability of representations or promises made outside of the disclosure document and the Franchise Agreement is limited. The document includes an integration/merger clause stating that only the terms within the Franchise Agreement and its exhibits are binding, subject to state law. This means any verbal promises or representations made by Boulder Designs that are not written into the agreement may not be legally enforceable.
For prospective Boulder Designs franchisees, this highlights the importance of ensuring all material terms and conditions are included in the written Franchise Agreement. Any promises or assurances made during the negotiation process should be documented and incorporated into the agreement to ensure they are legally binding. This protects the franchisee's interests and provides clarity regarding the obligations and expectations of both parties.
However, the FDD also provides some state-specific protections. For example, in California, any provision in a franchise agreement that disclaims or denies representations made by Boulder Designs or its agents to a prospective franchisee, or denies reliance by a franchisee on such representations, is deemed contrary to public policy and is void and unenforceable. This suggests that, at least in California, franchisees may have some recourse for misrepresentations made outside of the franchise agreement. Similarly, Illinois law states that no statement signed by a franchisee can waive claims under state franchise law, including fraud in the inducement, or disclaim reliance on behalf of the Franchisor.
Given these complexities, prospective Boulder Designs franchisees should seek legal counsel to understand the specific implications of the integration clause and any state-specific laws that may affect the enforceability of representations made outside the written agreement. It is crucial to have a clear understanding of their rights and obligations before entering into a franchise agreement.