In the Buildingstars agreement, what must the franchisee do regarding the covenants and provisions?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
leaning services; pricing information; financial information furnished or disclosed to FRANCHISEE by BUILDINGSTARS or its Affiliates and any other information with respect to BUILDINGSTARS, unless such information is generally known and in the public domain, and except to the extent necessary to operate the Business ("Confidential Information"). FRANCHISEE will exercise the highest degree of diligence and make every effort to maintain the absolute confidentiality of all trade secrets and proprietary rights during and after the term of this Agreement.
X. RESTRICTIVE COVENANT
A. FRANCHISEE agrees that during the term of this Agreement and for one (1) year after the Transfer, expiration or termination for any reason of this Agreement or the entry of a final order of a court of competent jurisdiction enforcing this covenant, whichever is later, FRANCHISEE and any of its relatives, or associates, shall not, directly or indirectly, for FRANCHISEE or for any other person or entity (except BUILDINGSTARS):
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- Provide or attempt to provide (or others of the opportunity to provide), directly or indirectly, any Services to any Customer for which FRANCHISEE has rendered services under this Agreement or to which FRANCHISEE has been introduced by or about which FRANCHISEE has received information by being a Buildingstars franchisee.
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- In the event that there is a breach of this provision, Franchisee shall pay BUILDINGSTARS a fee equal to 3 times the monthly amount agreed to be paid by the Customer for the Services.
B. FRANCHISEE agrees that during the term of this Agreement and for one (1) year after the Transfer, expiration or termination for any reason of this Agreement or the entry of a final order of a court of competent jurisdiction enforcing this covenant, whichever is later, FRANCHISEE and any of its relatives, or associates, shall not, directly or indirectly, for FRANCHISEE or for any other person or entity (except BUILDINGSTARS):
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- Contact, solicit, attempt to contact or solicit, or participate or aid with the contact or solicitation of or provide or attempt to provide (or advise others of the opportunity to provide directly or indirectly any cleaning or janitorial services to any Customer for any reason other than providing services pursuant to this Agreement, including but not limited to notifying any Customer of FRANCHISEE'S new affiliation or employment;
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- Contact or solicit, attempt to contact or solicit, or participate or aid in the contact or solicitation of, any Service Provider for the purpose of inducing or encouraging him, her or it to terminate or materially alter their employment, engagement, franchise relationship or other business relationship with BUILDINGSTARS, any Affiliate, or other franchisee;
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- Do or take any action to circumvent or otherwise attempt to take away or interfere with or jeopardize the business relationship between the Customer and BUILDINGSTARS. FRANCHISEE acknowledges and agrees any interference with the Customer's business or the relationship between BUILDINGSTARS and Customers is in direct violation of this provision.
C. Reasonableness of the Restriction. BUILDINGSTARS intends to restrict the activities of the FRANCHISEE under Sections IX and X of this Agreement only to the extent necessary for the protection of BUILDINGSTARS' legitimate business interests. For the sake of clarity, nothing herein is to restrict FRANCHISEE from providing janitorial/cleaning services to any entity or person that is not a Customer; provided however, that the foregoing shall not alter FRANCHISEE's obligations, including but not limited to Section IX above, under this Agreement. The foregoing covenants shall be construed as severable and independent and shall be interpreted and applied consistent with the requirements of reasonableness and equity.
Source: Item 23 — RECEIPT (FDD pages 43–217)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, the franchisee agrees to several covenants and provisions, primarily related to restrictive covenants, standards of operation, and compliance with Buildingstars' system. During the term of the agreement and for one year after its termination, the franchisee is restricted from providing services to Buildingstars' customers they served or were introduced to through Buildingstars. If this provision is breached, the franchisee must pay Buildingstars a fee equal to three times the monthly amount the customer agreed to pay for services. Franchisees also cannot contact or solicit Buildingstars' customers for any reason other than providing services under the agreement.
Buildingstars intends to restrict the franchisee's activities only to the extent necessary to protect its legitimate business interests. The franchisee must comply with Buildingstars' written policies, practices, procedures, regulations, and standards, as outlined in the Confidential Operations Manual or other materials provided by Buildingstars, which may be modified over time. The franchisee must use equipment, products, and supplies that meet Buildingstars' standards and specifications. The franchisee must also continuously and prominently display Buildingstars' marks and avoid any action that could detract from Buildingstars' public image.
The franchisee acknowledges that any interference with Buildingstars' customer relationships is a direct violation of the agreement. All covenants, including those related to restrictive covenants, are to be interpreted and applied reasonably and equitably. Buildingstars has the right to modify the scope of any covenant without the franchisee's consent, effective immediately upon written notice. In the event of a breach or threatened breach of the agreement, Buildingstars is entitled to injunctive relief, in addition to other available remedies, without needing to prove actual damages and without being required to post a bond. The franchisee also agrees to maintain certain insurance coverages during the term of the agreement.