Founder's Day celebrated the 1850 founding of Hill Valley. Residents celebrated with food, games, and competitions.
In 1992, sheriff Andy Taylor called Emmett Brown, and Hill Valley's other "crackpots" with a warning to not cause anything that would ruin the Founder's Day celebration. Ultimately, Doc ended up causing a power outage.
Doc then tried to make amends by increasing the output of the Hill Valley power grid. However, this ended up causing appliances to become overloaded, which prevented them from being turned off. Sheriff Taylor told Doc he wasn't allowed in Hill Valley anymore, and Biff Tannen joined a mob of the townspeople that physically removed Doc from the city.
When Biff's attempts to fix the power plant led to explosions, Doc saved Hill Valley, but the power plant needed extensive repairs that would take some time to fix. The residents decided to take the opportunity to celebrate the Founder's Day Celebration in a similar manner as the people who lived in Hill Valley when it was founded in 1850.