What constitutes a breach of the Buildingstars non-compete agreement regarding customers?
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. In the event a court of competent jurisdiction shall determine the business, time, or geographic limitations contained in this Agreement are illegal, invalid or unenforceable, then, the court so holding shall reduce the limitation necessary to render such restriction enforceable by such court.
Source: Item 23 — RECEIPT (FDD pages 43–217)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, the non-compete agreement restricts a franchisee's activities both during the term of the agreement and for one year after its termination, transfer, or expiration. Specifically, a Buildingstars franchisee breaches the agreement if they directly or indirectly provide or attempt to provide services to any customer they served or learned about through their Buildingstars franchise. This includes customers for whom the franchisee rendered services or to whom the franchisee was introduced to as a Buildingstars franchisee.
Additionally, franchisees are prohibited from contacting, soliciting, or attempting to contact or solicit any Buildingstars customers for reasons other than providing services under the franchise agreement. This encompasses notifying customers of the franchisee's new business affiliations or employment. Any action that interferes with the business relationship between Buildingstars and its customers is considered a direct violation of the non-compete provision.
If a Buildingstars franchisee breaches these non-compete provisions, they must pay Buildingstars a fee equal to three times the monthly amount the customer agreed to pay for services. Buildingstars also has the right to seek injunctive relief for any violation or threatened violation of the non-compete agreement, in addition to any other legal or equitable remedies available. The FDD states that Buildingstars intends to restrict franchisee activities only to the extent necessary to protect its legitimate business interests, and the restrictions are deemed reasonable and not an undue burden on the franchisee's ability to earn a livelihood.