Under what conditions is a business NOT considered a 'Competitive Business' for Boulder Designs franchisees?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
- "Competitive Business" means any business that offers or provides (or grants franchises or licenses to others to operate a business that offers or provides) engraved concrete signage or concrete landscaping products or other products or services that are the same as or similar to those sold by the Franchised Business or in which Trade Secrets or other Confidential Information could be used to the disadvantage of Franchisor, any Affiliate or Boulder Designs' other franchisees; provided, however, that the term "Competitive Business" shall not apply to (a) any business operated by Franchisee under a franchise agreement with Franchisor, (b) any business operated by a publicly-held entity in which Franchisee owns less than a 5% legal or beneficial interest.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, a 'Competitive Business' is defined as any business offering engraved concrete signage, concrete landscaping products, or similar services that could potentially utilize Boulder Designs' trade secrets to the detriment of the franchisor, its affiliates, or other franchisees. However, there are specific exceptions to this definition.
Specifically, a business is NOT considered a 'Competitive Business' if it meets either of the following conditions: (a) it is operated by the franchisee under a franchise agreement with Boulder Designs, or (b) it is operated by a publicly-held entity in which the franchisee owns less than a 5% legal or beneficial interest. This means a franchisee can own a small stake in a large, publicly traded company that might have some overlapping business activities without violating the non-compete terms.
This definition is important for prospective franchisees as it clarifies the scope of activities they are restricted from engaging in, both during the term of their franchise agreement and potentially after its termination or expiration. Understanding these exceptions is crucial for franchisees who may have existing business interests or who are considering future investments. It is also important to note that the definition of 'Competitive Business' is broad and includes not only direct competitors but also businesses that offer similar products or services, or those that could potentially utilize Boulder Designs' confidential information.