Besides the Area granted in the Buildingstars franchise agreement, what is the geographic scope of the non-competition restriction for a former Buildingstars franchisee?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
ility companies, or other entities or otherwise perform any services for, engage in or acquire, be an employee of, have any financial interest in, loan money to, or have any interest based on profits or revenues of, any cleaning service business or janitorial business within the Area or within any 10 mile
area where BUILDINGSTARS or any Affiliate, franchisee or licensee of BUILDINGSTARS is operating.
B. Non-Solicitation.
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- 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):
- a. 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.
- b. 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.
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Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, the non-competition restrictions extend beyond the franchisee's designated area. Specifically, the franchisee is restricted from providing services to any customer they served or were introduced to during their time as a Buildingstars franchisee.
This restriction applies during the term of the agreement and for one year after the agreement's transfer, expiration, or termination. It also applies for one year after a court order enforcing the covenant, whichever is later. This means a former Buildingstars franchisee cannot directly or indirectly solicit or provide cleaning services to customers they gained access to through Buildingstars.
The restrictions are designed to protect Buildingstars' customer relationships and business interests. However, the agreement clarifies that franchisees are not restricted from providing janitorial services to entities or persons who are not Buildingstars customers. Buildingstars retains the right to reduce the scope of any covenant contained in Sections IX and X, without the franchisee's consent, effective immediately upon receipt by the franchisee of written notice.
If a franchisee violates these non-competition terms, they must pay Buildingstars a fee equal to three times the monthly amount the customer agreed to pay for services. Buildingstars can also seek injunctive relief for violations or threatened violations, meaning they can ask a court to order the franchisee to stop the prohibited behavior.