Under what conditions can the post-termination covenant not to compete be waived for a Boulder Designs franchisee?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
Except as otherwise approved in writing by Franchisor, neither Franchisee, nor any Covered Person shall, for a period of three years after the expiration or termination of this Agreement, regardless of the cause of termination, either directly or indirectly, for themselves or through, on behalf of or in conjunction with, any person, persons, partnership, corporation, limited liability company or other business entity:
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, the post-termination covenant not to compete can be waived only if approved in writing by Boulder Designs. The standard non-compete agreement states that for three years after the termination or expiration of the Franchise Agreement, the franchisee and any covered person cannot directly or indirectly engage in a competitive business. This restriction applies regardless of the reason for termination.
Boulder Designs enforces this covenant to protect its trade secrets, confidential information, and the investment it makes in training franchisees. The FDD emphasizes that these restrictions are considered fair and reasonable because franchisees possess other skills and experiences that allow them to earn income from other sources.
This means that a franchisee seeking to avoid the non-compete obligations must obtain explicit written permission from Boulder Designs. Without this written approval, the franchisee is legally bound to refrain from engaging in any competitive business for the specified three-year period within the defined territory. It is important for prospective franchisees to understand the scope and enforceability of these covenants before entering into a franchise agreement.