Besides the franchisee, who else is subject to the non-compete restrictions outlined in the Buildingstars franchise agreement?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
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.
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;
- b.
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;
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, the non-solicitation clause extends beyond the franchisee to include their relatives and associates. This means that these individuals are also restricted from engaging in activities that could harm Buildingstars's business interests, such as providing services to Buildingstars customers or soliciting Buildingstars's service providers.
The restrictions apply during the term of the Franchise Agreement and for one year after its transfer, expiration, or termination. This post-term restriction is triggered by any reason for termination or after a court order enforcing the covenant. The definition of "relatives" and "associates" is not provided in this excerpt, so a prospective franchisee should seek clarification from Buildingstars on who exactly this encompasses to fully understand the scope of the non-compete obligations.
If a franchisee, their relatives, or associates breach the non-solicitation provision, the franchisee is obligated to pay Buildingstars a fee. This fee is calculated as three times the monthly amount that the customer agreed to pay for services. This penalty underscores the importance Buildingstars places on protecting its customer relationships and ensuring compliance with the non-solicitation terms.
This type of non-compete and non-solicitation clause is common in franchising to protect the franchisor's customer base, trade secrets, and overall business model. Prospective Buildingstars franchisees should carefully review these restrictions and consider how they might impact their family members or business partners before entering into the agreement.