Does Boulder Designs have the right to require a Non-Disclosure and Non-Competition Agreement from the franchisee and any Covered Person?

According to Boulder Designs' 2025 Franchise Disclosure Document, Boulder Designs retains the right to mandate that officers, managers, partners, certain individuals, and any Covered Person execute a standard form non-disclosure or non-competition agreement. This agreement is in the same format as the Non-Disclosure and Non-Competition Agreement attached as Exhibit 2 in the FDD. A "Covered Person" includes the individual franchisee, owners, officers, directors, managers, trustees, general partners, internal managers of the franchisee (if the franchisee is a business entity), and the spouses, adult children, parents, collaterals, or siblings of these individuals.

The agreement ensures the protection of Boulder Designs' confidential information and trade secrets. It prevents individuals associated with the franchisee from disclosing or using this information to benefit others or compete against Boulder Designs, the franchisee, or any other Boulder Designs franchisee. This obligation extends beyond the termination of the individual's relationship with the franchisee, regardless of the reason for termination.

The non-competition aspect of the agreement restricts franchisees and Covered Persons from owning an interest in, managing, operating, or providing services to any Competitive Business during the term of the Franchise Agreement. A Competitive Business is defined as one that offers similar products or services to Boulder Designs or uses its trade secrets or confidential information to the disadvantage of Boulder Designs or its franchisees. The restrictions apply within 25 miles of the Approved Location or within the Territory (whichever is greater), and within 25 miles of any other Boulder Designs Business.

These measures are in place to protect Boulder Designs' market position, trade secrets, and confidential information. Prospective franchisees should carefully review Exhibit 2 of the Franchise Agreement to fully understand the terms and conditions of the Non-Disclosure and Non-Competition Agreement, as well as the definitions of "Confidential Information", "Trade Secrets", "Competitive Business", and "Covered Person" to understand the full scope of these restrictions.