During the term of the Boulder Designs franchise, are franchisees allowed to own or work for a Competitive Business?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
| d. Termination by Franchisee | Section 16.1 | You have a one-time option to terminate the Franchise Agreement at the end of the fifth calendar year, if you provide advance notice and sign a general and full release. You may terminate the Franchise Agreement if we materially breach and fail to cure (or begin curing) the breach within 30 days of receiving your written notice. |
|---|---|---|
| (Subject to state law) |
| q.
Non-competition
covenants during the
term of the franchise | Sections 7.3 and
7.4 | You, your owners (and members of their
families and collaterals) and your officers,
directors,
executives,
managers,
and
employees are prohibited from: attempting
to divert any customer, employee or other
business associate of ours, the Franchised
Business, our Affiliate(s) or any other
franchisee to a Competitive Business, or
soliciting or attempting to induce
any
customer, employee or other business
associate of ours, the Franchised Business,
our Affiliate(s) or any other franchisee to
terminate
or
modify
their
business
relationship
with
Us,
the
Franchised
Business, our Affiliate(s) or any other
franchisee or causing injury or prejudice to
the Marks or the System; owning or
working for a Competitive Business.
(Subject to state law)
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 38–44)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, franchisees, their owners, family members, officers, directors, executives, managers, and employees are prohibited from owning or working for a Competitive Business during the term of the franchise agreement. This restriction is subject to state law.
In practical terms, this means that as a Boulder Designs franchisee, you and related parties are restricted from engaging with any business that competes with Boulder Designs. This includes direct employment or ownership in a competing business. The FDD specifies that franchisees are prohibited from diverting customers or business associates to a competitive business, or from causing prejudice to the Boulder Designs brand or system.
This non-compete clause is a standard practice in franchising to protect the brand, trade secrets, and customer relationships. Prospective franchisees should carefully consider the implications of this restriction, especially if they have prior experience or interests in similar industries. It is important to understand the definition of "Competitive Business" as defined in the Franchise Agreement to fully grasp the scope of this restriction.
It is also important to note that the non-compete obligations might be subject to state laws, which can vary significantly. Therefore, a prospective franchisee should seek legal counsel to understand the enforceability and specific implications of the non-compete clause in their state.