Under what condition will each provision of the Amendment be effective for a Boulder Designs franchise?

According to Boulder Designs' 2025 Franchise Disclosure Document, the Amendment to the Franchise Agreement is executed simultaneously with the execution of the Franchise Agreement. Specifically, the amendment regarding Section 3.1 of the Franchise Agreement, which pertains to the payment of Initial Franchise Fees, becomes effective once Boulder Designs has fulfilled its initial obligations to the franchisee and the franchisee has commenced business operations. Until these conditions are met, the payment of Initial Franchise Fees is deferred.

This simultaneous execution ensures that both parties are in agreement with the terms of the franchise arrangement from the outset. The deferral of Initial Franchise Fees until Boulder Designs meets its initial obligations and the franchisee begins operations provides a degree of financial security for the franchisee. It aligns the franchisor's interests with the franchisee's success, as the franchisor is not paid the initial fee until the franchisee is ready to start the business.

This arrangement is not uncommon in franchising, as it can help to reduce the financial burden on new franchisees during the initial startup phase. It also ensures that the franchisee is not paying for services or support that have not yet been provided. However, prospective Boulder Designs franchisees should carefully review the specific obligations that Boulder Designs must fulfill before the Initial Franchise Fees become due, as well as the timeline for meeting those obligations. Understanding these details is crucial for managing their initial investment and cash flow.