Does Boulder Designs have the right to terminate the franchise agreement if the franchisee defaults?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
red and as to which Franchisor may consent, provided such request for extension is provided to Franchisor in writing at least 30 days after the Effective Date.
Section 5.4 Failure to Begin Operations
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.
Section 5.5 Opening
Before opening the Franchised Business and commencing business, Franchisee must:
i. fulfill all of its obligations pursuant to the other provisions of this Section 5.6;
- ii. furnish Franchisor with copies of all insurance policies required by this Agreement and by the lease (if the Approved Location is leased), or such other evidence of insurance coverage and payment of premiums as Franchisor may request;
- iii. complete initial training to the satisfaction of Franchisor;
- iv. hire and train the personnel necessary or required for the operation of the Franchised Business;
- v. obtain all necessary permits and licenses;
- vi.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, Boulder Designs has the right to terminate the franchise agreement if the franchisee fails to begin operating the franchised business within 180 days after the effective date. However, Boulder Designs must give the franchisee a 30-day period to correct this failure. If the franchisee does not begin operations within this 30-day cure period, Boulder Designs can terminate the agreement, and the franchisee will not receive a refund of any amounts paid.
Additionally, Boulder Designs can terminate the agreement if the franchisee violates Section 5.6, which mandates that the approved location is used only for operating a Boulder Designs business in compliance with the franchise agreement and the manual.
Furthermore, Boulder Designs retains the right to terminate the agreement if the franchisee fails to maintain high standards of quality and service, or if the franchisee's actions are injurious to Boulder Designs' business and goodwill. This includes ensuring prompt and courteous service, resolving customer complaints, and adhering to ethical conduct in dealings with customers, suppliers, and the public. Failure to adhere to these standards constitutes a default of the agreement, giving Boulder Designs grounds for termination.