factual

Under what conditions will a Boulder Designs franchisee's interest in the franchise terminate following a default?

Boulder_Designs Franchise · 2025 FDD

Answer from 2025 FDD Document

Provision Section in the Summary
Franchise Agreement
a. Length of the franchise Section 4.1 10 years.
term
b. Renewal or extension of Section 4.2 Additional 10-year term if certain conditions
the term are met.
Provision Section in the Franchise Agreement Summary or modify their business relationship with Us, our Affiliate(s) or any other franchisee.
s. Modification of the Sections 9.2 and The Franchise Agreement can be modified
agreement 22.6 only by written agreement between you and us.
t. Integration/merger clause Section 22.6 Only the terms of the Franchise Agreement and all exhibits to the Franchise Agreement are binding (subject to state law). Any representations or promises made outside of the disclosure document and the Franchise Agreement may not be enforceable.
u. Dispute resolution by arbitration or mediation Section 23.7 Except for actions or claims for injunctive relief or specific performance or relating to the Marks, Trade Secrets or Confidential Information, all disputes must be mediated in McLennan County, Texas. (Subject to state law)
v. Choice of forum Section 23.2 Litigation must be initiated and maintained in the judicial district in which our principal place of business is located at the time the lawsuit was initiated, currently Waco, Texas. We have the right to seek injunctive relief from any court of competent jurisdiction. (Subject to state law)
w. Choice of law Section 23.1 Texas law applies (subject to state law), except that disputes over the Marks will be governed by the United States Trademark Act of 1946.
Section in the
Franchise
Summary
Agreement
Agreement following a default, your interest in
the franchise will terminate.
5.4, 5.5.
We can terminate if you fail to develop the
and 16.2
Approved Location within 180 days after the
Effective Date of the Franchise Agreement. We
also can terminate for failure to pay the Initial
Franchise Fee or other amounts due within 10
days after receiving written notice; failure to
have your Internal Manager satisfactorily
complete any training program; attempted or
actual transfer of business in violation of the
Franchise Agreement; misuse of the Marks, or
other act which impairs the goodwill of any of
the Marks; material misrepresentation or
omission in your franchise application; are
conviction or "no contest" plea to a crime or
offense that would place them on the sex
offenders registry, was a violent felony, crimes
against a human, sexual harassment against an
employee, domestic abuse charges, animal
abuse, elderly abuse, substance abuse, DWI or
DUI, any theft charge or is likely to affect the
reputation of either party or the Franchised
Business; disclose, duplicate, or otherwise
misuse the Manual, Confidential Information
or the Marks; are adjudicated bankrupt,
insolvent or make a general assignment for the
benefit of creditors or to pay any fees due us or
any Affiliate; receive three or more default
notices within two years,(or failure on 2 or
more separate noticed occasions to comply
with the same obligation in any time-frame);
continue to violate any health, safety or other
laws or conduct the Franchised Business in a
manner creating a health or safety hazard to
customers, employees or the public; take any
action reserved to us; fail to comply with
applicable law after notice; repeatedly breach
the Franchise Agreement or fail to comply with
specifications; engaging in wholesale
transactions without our prior written consent;
or default under any other agreement between
you and us(or an Affiliate) such that we (or the
Affiliate) have the right to terminate the
agreement.

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, a franchisee's interest in the franchise will terminate following a default under the conditions specified in Sections 5.4, 5.5, and 16.2 of the Franchise Agreement. These sections outline various scenarios that can lead to termination.

Specifically, Boulder Designs can terminate the franchise agreement if the franchisee fails to develop the Approved Location within 180 days after the Effective Date of the Franchise Agreement. Termination can also occur for failure to pay the Initial Franchise Fee or other amounts due within 10 days after receiving written notice. Other causes for termination include failure to have the Internal Manager satisfactorily complete any training program, attempted or actual transfer of the business in violation of the Franchise Agreement, or misuse of the Marks.

Additional grounds for termination by Boulder Designs include material misrepresentation or omission in the franchise application, conviction or a "no contest" plea to certain crimes or offenses, misuse of confidential information, bankruptcy or insolvency, receiving three or more default notices within two years, violating health or safety laws, taking actions reserved to the franchisor, failing to comply with applicable law after notice, repeatedly breaching the Franchise Agreement, engaging in wholesale transactions without prior written consent, or defaulting under any other agreement with Boulder Designs. The termination of one Franchise Agreement does not automatically terminate other agreements unless the breach is material to those agreements as well, or if both parties agree to terminate in writing.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.
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