After termination or expiration of the franchise agreement, is a Boulder Designs franchisee prohibited from owning or operating a competitive business within 25 miles of another Boulder Designs location?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
- i. own an interest in, manage, operate or provide services to any Competitive Business located or operating (a) within 25 miles of the Approved Location or within the Territory (whichever is greater), and (b) within 25 miles of the location of any other BOULDER DESIGNS Business in existence at the time of termination or expiration; or
- ii. solicit or otherwise attempt to induce or influence any customer, employee or other business associate of Franchisor, its Affiliate(s) or any other franchisee to terminate or modify his, her or its business relationship with Franchisor, its Affiliate(s) or any other franchisee, by direct or indirect inducement or otherwise.
In furtherance of this Section, Franchisor has the right to require officers, managers, and partners along with certain individuals and any Covered Person to execute a standard form non-disclosure or noncompetition agreements in a form the same as the Non-Disclosure and Non-Competition Agreement attached as Exhibit 2.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, a franchisee is restricted from engaging in unfair competition after the termination or expiration of the franchise agreement. Specifically, the franchisee cannot own an interest in, manage, operate, or provide services to any competitive business within 25 miles of the Approved Location or within the Territory, whichever is greater. This restriction also applies within 25 miles of any other Boulder Designs business existing at the time of termination or expiration.
This non-compete clause aims to protect Boulder Designs' market share and brand integrity by preventing former franchisees from directly competing with existing locations. The restriction extends not only to owning or operating a competing business but also to providing services to one. This broad definition ensures that former franchisees cannot leverage their knowledge and experience gained from the Boulder Designs system to unfairly compete in the same geographic area.
Furthermore, the FDD states that Boulder Designs has the right to require officers, managers, partners, and certain individuals to execute a standard form non-disclosure or non-competition agreement. This highlights the importance Boulder Designs places on protecting its confidential information and competitive advantage. The non-compete agreement attached as Exhibit 2 further details the specific terms and conditions of this restriction.
It is important for prospective franchisees to carefully review the non-compete agreement and understand the scope and duration of these restrictions before entering into a franchise agreement with Boulder Designs. Franchisees should also consider how these restrictions might impact their future business opportunities should they decide to leave the Boulder Designs system.