Border Magic Franchise

Financing Details

Border Magic Franchising, LLC offers direct financing for a portion of the equipment and supplies package. If a franchisee meets the credit standards, the franchisor may finance up to 50% for new equipment or up to 75% for used or refurbished equipment. This financing is provided for a maximum of 42 months at an 8.5% annual interest rate. Payments consist of equal monthly installments of principal and accrued interest, with the final 42nd installment covering any remaining balance. The loan can be repaid early without penalty. However, if a franchisee defaults on payments, Border Magic Franchising, LLC can demand immediate payment of the full outstanding balance, repossess equipment, and terminate the franchise agreement. Franchisees also waive certain rights regarding collection actions and potential defenses against the franchisor. A personal guarantee from the owner(s) and automatic bank withdrawals are required. Aside from this specific equipment financing, Border Magic Franchising, LLC does not offer any other direct or indirect financing and does not guarantee third-party loans or obligations.

Litigation Summary

Border Magic Franchising, LLC, and its affiliate Boulder Designs Franchising, LLC, have been involved in four legal actions disclosed in Item 3. Three of these cases primarily involved Boulder Designs, LLC, an affiliate of Border Magic, and concerned disputes with former franchisees over alleged deceptive practices, fraud, breach of contract, and the misuse of confidential information and trade secrets. All three cases resulted in confidential settlements between 2021 and 2022. A fourth case, filed in October 2022 by Border Magic Franchising, LLC and its affiliate, was against a franchisee for breach of contract, attempting to prevent them from operating a competing business and seeking unpaid royalties. This matter was resolved, and the claims were dismissed as of April 2024.

Renewal Conditions

To renew their Border Magic franchise, franchisees must provide written notice at least nine months before their current term ends. They need to be in full compliance with their franchise agreement and all other agreements, ensuring all payments and obligations are up-to-date. Franchisees are also required to renovate their physical location to meet Border Magic's latest image standards. Additional conditions include paying a renewal fee, being in good standing with all licenses and certifications, meeting current qualification and training requirements, completing drug testing and background screening, and providing proof of updated certifications. Finally, franchisees must sign a new franchise agreement, which may have different terms than their original agreement, and execute a general release of claims.

Staffing Notes

Border Magic Franchising, LLC requires that each franchised business be overseen full-time by an Internal Manager who has completed the franchisor's training and signed a Non-Disclosure and Non-Competition Agreement. Although not mandatory, Border Magic Franchising, LLC recommends that an owner also actively participate in and supervise operations. The Operations Manual provides extensive guidelines on human resources, covering topics like EEOC guidelines, anti-harassment laws, wage and labor laws, job descriptions, recruitment, interviewing, personnel policies, employee orientation, confidentiality, training, compensation, time reporting, uniform/dress code, performance evaluations, and disciplinary procedures. While Border Magic Franchising, LLC does not prohibit franchisees from hiring employees from other Border Magic locations, if a franchisee hires an employee who attended the franchisor's training within the last year, they must reimburse the previous franchisee for that employee's training costs.