Who is responsible for the cost to identify and remediate a security breach within a Boulder Designs franchise's information system?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor may designate the information system used in Franchisee's BOULDER DESIGNS franchise, including the computer hardware, software, other equipment and enhancements (the "Information System"). In such event, in connection with the approved Information System, Franchisee agrees to the provisions set forth below. If Franchisee suspects or know of a security breach, Franchisee must immediately give notice of such security breach and promptly identify and remediate the source of any compromise of security breach at your expense. Franchisee assumes all responsibility for providing all notices of beach or compromise and all duties to monitor credit histories and transactions concerning customers of the BOULDER DESIGNS franchise, unless otherwise directed by the Franchisor.
Franchisee shall be solely responsible for protecting itself from disruptions, Internet access failures, Internet content failures, and attacks by hackers and other unauthorized intruders and Franchisee waives any and all claims Franchisee may have against the Franchisor or its affiliates as the direct or indirect result of such disruptions, failures, or attacks. If Franchisee suspects or know of a security breach, Franchisee must immediately give notice of such security breach and promptly identify and remediate the source of any compromise of security breach at Franchisee's sole expense. Franchisee assumes all responsibility for providing all notices of breach or compromise and all duties to monitor credit histories and transactions concerning customers of the BOULDER DESIGNS franchise, unless otherwise directed by the Franchisor.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, the franchisee is responsible for covering the costs associated with identifying and remediating any security breach within their franchise's information system. Specifically, if a franchisee suspects or becomes aware of a security breach, they must immediately report it and then promptly identify and fix the source of the breach at their own expense. This includes providing all necessary notices of the breach, monitoring credit histories, and overseeing transactions concerning customers of the Boulder Designs franchise, unless the franchisor directs otherwise.
This allocation of responsibility means that a Boulder Designs franchisee must be prepared to handle and finance any cybersecurity incidents that may occur. This could involve hiring IT professionals or cybersecurity firms to investigate the breach, implement security measures, and manage communications related to the incident. The franchisee also assumes all responsibility for protecting themselves from disruptions, internet access failures, internet content failures, and attacks by hackers and other unauthorized intruders and waives any and all claims Franchisee may have against the Franchisor or its affiliates as the direct or indirect result of such disruptions, failures, or attacks.
Furthermore, the franchisee is required to comply with all applicable federal, state, and local laws, rules, and regulations regarding data security, protection, and privacy, including any privacy policies and breach response policies established by Boulder Designs. This compliance adds another layer of responsibility for the franchisee, as they must stay informed about and adhere to evolving data security standards and legal requirements. The franchisee must also notify Boulder Designs immediately regarding any actual or suspected data breach at or in connection with the Franchised Business.
Given these stipulations, prospective Boulder Designs franchisees should carefully consider the potential costs and liabilities associated with data security and ensure they have adequate resources and expertise to manage these risks effectively. It would be prudent to discuss with the franchisor what specific information systems are approved, what security measures are recommended, and what support or training is provided to help franchisees protect against and respond to security breaches.