Is the transfer of ownership to a Boulder Designs franchisee's genetically-related parents or children considered a transfer under the agreement?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
- "Covered Person" means (i) the individual executing this Agreement as Franchisee; (ii) each Owner, officer, director, manager, trustee, or general partner and Internal Manager of Franchisee and each Franchisee Affiliate if Franchisee is a Business entity; and (iii) the spouse, adult children, parents, collaterals, or siblings of the individuals included in (i) and (ii).
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, the franchise agreement considers a franchisee's parents or children as "Covered Persons."
The Boulder Designs franchise agreement defines "Covered Person" to include specific individuals and entities associated with the franchisee. This definition extends not only to the individual franchisee and owners, officers, directors, managers, trustees, or general partners of the franchisee (if a business entity) but also to the spouse, adult children, parents, collaterals, or siblings of these individuals. This broad definition has implications for various aspects of the franchise agreement, including confidentiality, non-compete obligations, and potentially transfer restrictions.
While the definition of "Covered Person" includes parents and children, the provided excerpts do not explicitly state whether a transfer of ownership to these individuals is considered a transfer under the agreement. The franchise agreement likely contains specific clauses addressing the transfer of ownership, including any restrictions, required approvals, and associated fees. A prospective franchisee should carefully review Article 18 of the Franchise Agreement, as referenced in the Guaranty and Assumption of Obligations, and seek clarification from Boulder Designs regarding the specific requirements and implications of transferring ownership to a Covered Person, such as a parent or child.