What security is required by Boulder Designs for equipment and supplies financing?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
| Item Financed (Source) | Amount Financed | Down Payment | Max. Term (years) | Annual % Rate of Interest | Monthly Payment | Pre payme nt Penalty | Security Required | Liability upon Default | Loss of Legal Right on Default |
|---|---|---|---|---|---|---|---|---|---|
| Equipment and Supplies Package | Up to 50% of the cost of the package if it is new equipment, including any upgrades; up to 75% of the cost of the package if it is used or refurbished equipment | Depends on credit rating | 42 months | 8.5% | Principal and interest amortized over 42 months | None | Personal Guaranty; Security Agreeme nt | Call loan; Repossess equipment; Terminate franchise agreement | Waive demand, presentment for payment protest, notice of intent to accelerate, notice of acceleration |
Source: Item 10 — FINANCING (FDD pages 23–24)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, if Boulder Designs provides financing for the equipment and supplies package, the security required includes a personal guaranty and a security agreement. Boulder Designs may finance up to 50% of the cost if the equipment is new, or up to 75% if the equipment is used or refurbished.
This means that in addition to the equipment itself serving as collateral, Boulder Designs requires a personal guarantee, which makes the franchisee personally liable for the debt. This is a fairly standard practice in franchising, as it reduces the risk for the franchisor. The security agreement gives Boulder Designs a legal claim on the equipment and supplies being financed, allowing them to repossess these assets if the franchisee defaults on the loan.
Furthermore, the franchisee must sign an automatic bank withdrawal form to ensure timely payments of interest and principal. In the event of default, Boulder Designs can call the loan, repossess the equipment, and terminate the franchise agreement. The franchisee also waives certain rights, such as notice of a collection action. These terms highlight the importance of carefully considering the financial obligations and risks associated with financing through Boulder Designs.