When does the weekly fee for violating the Boulder Designs agreement start accruing?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
respect thereto shall continue in full force and effect.
The paragraph headings in this Agreement are included solely for convenience and shall not affect, or be used in connection with, the interpretation of this Agreement. Whenever the context of this Agreement requires, the masculine gender includes the feminine or neuter and vice versa, and the singular number includes the plural. Capitalized terms not herein defined shall have the meaning set forth in the Franchise Agreement.
The Company shall be a third-party beneficiary of this Agreement.
If individual violates this Agreement and competes with Franchisor, its Assigns, or any Franchisees, Franchisor has the right to require that all sales made by the competitive business are reported to Franchisor. Individual will also pay to Franchisor, without demand, a weekly fee of $1000, retroactive to the first date of the violation and for each week that the violation continues or until judicial order is entered, without being deemed to revive or modify this Agreement. These payments are liquidated damages to compensate Franchisor for its damages from Individual's violation of this covenant not to compete and are not a penalty. Individual agrees that the length of time and geographical restrictions contained in this Agreement are fair and reasonable and not the result of overreaching, duress or coercion of any kind. Individual agrees that its full, uninhibited and faithful observance of each of the covenants in this Section will not cause any undue hardship financial or otherwise and that the enforcement of each of these covenants in this Section will not impair Individual's ability to obtain employment commensurate with Individual's abilities and
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, if a franchisee violates the agreement by competing with Boulder Designs, its assigns, or any franchisees, Boulder Designs has the right to require the franchisee to report all sales made by the competitive business. Additionally, the franchisee will pay Boulder Designs a weekly fee of $1,000.
This fee is retroactive to the first date of the violation. The franchisee must continue to pay this fee for each week that the violation continues, or until a judicial order is entered. These payments are considered liquidated damages to compensate Boulder Designs for damages resulting from the franchisee's violation of the non-compete agreement and are not considered a penalty.
The agreement emphasizes that the franchisee acknowledges the fairness and reasonableness of the time and geographical restrictions, confirming they were not the result of overreaching, duress, or coercion. The franchisee also agrees that adhering to these covenants will not cause undue hardship and will not impair their ability to obtain suitable employment or income. This highlights the importance of understanding and adhering to the non-compete terms outlined in the Boulder Designs franchise agreement to avoid incurring these substantial weekly fees.