What are the specific obligations of a Boulder Designs franchisee regarding the use of approved suppliers (Item 8) and how are these obligations enforced (Item 9)?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
of coverage.
Bookkeeping and Records
You will establish and maintain a bookkeeping, accounting and record keeping system conforming to our requirements, as may be periodically revised. You will submit periodic reports, forms and records as specified in the Franchise Agreement or the Manual or otherwise.
Revenue Derived from Franchisee Purchases and Leases
We and our affiliates will derive revenue from your purchases and leases to the extent that you purchase or lease directly from our affiliates and us.
During our fiscal year ending December 31, 2024, Franchisor's total revenue based on the most recent audited financial statements states we derived $1,032,504 in revenue as a result of required purchases and leases, representing approximately 44.3% of our total revenue of $2,329,797.
Estimated Proportion of Required Purchases and Leases to all Purchases and Leases
We estimate that required purchases and leases (meaning purchases and leases from us, our designated suppliers and purchases and leases of items meeting our specifications) will account for approximately 58% of your purchases and leases in establishing the Boulder Designs Business and approximately 25% of your purchases and leases in operating the Boulder Designs Business.
Description of Purchasing Cooperatives; Purchasing Arrangements
We may negotiate purchase arrangements with primary suppliers for the benefit of franchisees, and receive rebates or other material benefits on account of franchisee purchases or leases. If we negotiate a purchase agreement for the region where your Boulder Designs Business is located, you must participate in the purchasing program.
We currently have a purchasing agreement with a third-party supplier for certain supplies, including paint and paint supplies. We receive a rebate between 2% and 4% on these supplies purchased by franchisees from this supplier.
We do not provide material benefits to you (for example, renewal or granting additional franchises) based on your purchase of particular products or services or use of particular suppliers.
ITEM 9 FRANCHISEE'S OBLIGATIONS
This table lists your principal obligations under the franchise and other agreements. It will help you find more detailed information about your obligations in these agreements and in other items of this disclosure document.
| Obligation | Section in the Franchise Agreement | Item in the Disclosure Document | |
|---|---|---|---|
| a. | Site selection and acquisition/lease | Article 5 | ITEMS 7, 11 and 12 |
| b. | Pre-opening purchases/leases | Articles 5, 12 and Exhibit 1 | ITEMS 7, 8 and 11 |
| c. | Site development and other pre-opening requirements | Articles 5 and 8 | ITEMS 7, 8 and 11 |
| d. | Initial and ongoing training | Article 8 | ITEMS 6, 7 and 11 |
| e. | Opening | Articles 5 and 8 | ITEM 11 |
| f. | Fees | Articles 3, 5, 8, 10, 11, 12, 13, 15, 18 and 21 | ITEMS 5, 6, 7 and 11 |
| g. | Compliance with standards and policies/Operating Manual | Articles 6, 7, 9, 10, 11, 12, 13 and 15 | ITEMS 8, 11 and 16 |
| h. | Trademarks and proprietary information | Articles 6, 7 and 9 | ITEMS 13 and 14 |
| i. | Restrictions on products/services offered | Articles 5, 6, 7, 10 and 13 | ITEMS 8 and 16 |
| j. | Warranty and customer service requirements | Article 13 | ITEM 16 |
| k. | Territorial development and sales quotas | Article 2 | ITEM 12 |
| l. | Ongoing product/service purchases | Article 13 | ITEMS 8 and 11 |
| Obligation | Section in the Franchise Agreement | Item in the Disclosure Document | |
| ---- | ----------------------------------------------------------- | --------------------------------------- | ------------------------------------ |
| m. | Maintenance, appearance and remodeling requirements | Articles 5, 10 and 13 | ITEM 6 |
| n. | Insurance | Article 15 | ITEMS 6, 7 and 8 |
| o. | Advertising | Articles 3 and 11 | ITEMS 6, 7 and 11 |
| p. | Indemnification | Article 21 | ITEM 6 |
| q. | Owner's participation/ management/ staffing | Articles 8 and 13 | ITEM 15 |
| r. | Records and reports | Articles 5 and 12 | ITEM 11 |
| s. | Inspections and audits | Articles 6, 12 and 16 | ITEMS 6, 11 |
| t. | Transfer | Articles 16 and 18 | ITEM 17 |
| u. | Renewal | Articles 4 and 16 | ITEM 17 |
| v. | Post-termination obligations | Article 17 | ITEM 17 |
| w. | Non-competition covenants | Articles 7, 17 and Exhibit 2 | ITEM 17 |
| x. | Dispute resolution | Article 23 | ITEM 17 |
ITEM 10 FINANCING
| Item Financed (Source) | Amount Financed | Down Payment | Max.
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, franchisees are obligated to adhere to the franchisor's requirements regarding bookkeeping, accounting, and record-keeping systems, which may be periodically revised. Franchisees must also submit periodic reports, forms, and records as specified in the Franchise Agreement or the Manual. Boulder Designs may negotiate purchase arrangements with primary suppliers for the benefit of franchisees and receive rebates or other material benefits on account of franchisee purchases or leases. If Boulder Designs negotiates a purchase agreement for the region where the franchisee's Boulder Designs Business is located, the franchisee must participate in the purchasing program. Currently, Boulder Designs has a purchasing agreement with a third-party supplier for certain supplies, including paint and paint supplies, and receives a rebate between 2% and 4% on these supplies purchased by franchisees from this supplier.
During the fiscal year ending December 31, 2024, Boulder Designs' total revenue based on the most recent audited financial statements states they derived $1,032,504 in revenue as a result of required purchases and leases, representing approximately 44.3% of their total revenue of $2,329,797. Boulder Designs estimates that required purchases and leases (meaning purchases and leases from them, their designated suppliers and purchases and leases of items meeting their specifications) will account for approximately 58% of a franchisee's purchases and leases in establishing the Boulder Designs Business and approximately 25% of their purchases and leases in operating the Boulder Designs Business.
To ensure compliance with quality control provisions and performance standards, Boulder Designs retains the right to inspect the Franchised Business and the Approved Location at all reasonable times. This includes observing how the franchisee renders services and conducts activities, inspecting facilities, equipment, accessories, products, supplies, reports, forms, documents, and related data. These inspections may also include audits or reviews to evaluate compliance with required payments, standards, specifications, or procedures. Boulder Designs may provide suggestions and mandatory instructions to ensure compliance with the System's quality standards and to protect its goodwill and image. Boulder Designs and its agents have the right to remove products, supplies, or other items to test whether they meet the franchisor's standards and can observe franchisees and their employees during business operations, interview clients and employees, and photograph or videotape the operations.
These visits do not imply compliance or waive Boulder Designs' right to require strict adherence to the Franchise Agreement or the Manual, nor do they create any responsibility or liability on Boulder Designs' part. Franchisees may request additional visits, but they will be responsible for the associated fees. Franchisees must also allow Boulder Designs to visit their franchise with prospective franchisees during business hours. Approved Suppliers are defined as companies and vendors who provide services, product items, supplies, signs, equipment, and other items and services that Boulder Designs approves and that comply with their specifications and quality standards. Boulder Designs will provide franchisees with a list of Approved Suppliers in the Manual or other written or electronic form.