Can a court modify a restrictive covenant in the Buildingstars agreement if it's deemed too broad?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
BUILDINGSTARS has the right to collect these amounts in addition to exercising any and all other rights BUILDINGSTARS may have for non-compliance under this Agreement.
XVI. MISCELLANEOUS PROVISIONS
- A. Waiver. No waiver by BUILDINGSTARS of any default of the FRANCHISEE shall constitute a waiver of any other default and shall not preclude BUILDINGSTARS from thereafter requiring strict compliance with this Agreement.
- B. Severability. Should any provision of this Agreement be construed or declared invalid, such decision shall not affect the validity of any remaining portion which shall remain in full force and effect as if this Agreement had been executed with such invalid portion eliminated. If any restriction contained in this Agreement is deemed too broad to be capable of enforcement, a court of competent jurisdiction is hereby authorized to modify or limit such restriction to the extent necessary to permit its enforcement. All covenants contained in this Agreement, including but not limited to those relating to non-solicitation and non-competition shall be interpreted and applied consistent with the requirements of reasonableness and equity.
- C. Injunctive Relief.
Source: Item 23 — RECEIPT (FDD pages 43–217)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, a court is authorized to modify or limit any restriction within the franchise agreement if it is deemed too broad to be capable of enforcement. The court can modify the restriction to the extent necessary to permit its enforcement. Buildingstars also has 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 franchisee of written notice. The franchisee must comply with any covenant as modified.
This means that if a Buildingstars franchisee feels that a restrictive covenant, such as a non-compete clause, is overly broad and prevents them from earning a livelihood, they can seek legal recourse. The court has the power to adjust the covenant to make it more reasonable and enforceable. This could involve reducing the geographic area or the time period during which the restriction applies.
Buildingstars also emphasizes that it intends to restrict the activities of the franchisee only to the extent necessary to protect its legitimate business interests. The agreement specifies that nothing restricts a franchisee from providing janitorial/cleaning services to any entity or person that is not a Buildingstars customer. This provides some clarity and reassurance to the franchisee that they are not completely barred from working in the industry after the franchise agreement ends.
It's important for prospective Buildingstars franchisees to carefully review the restrictive covenants in the franchise agreement and understand their scope and limitations. If there are concerns about the reasonableness of these covenants, it's advisable to seek legal counsel to assess their enforceability and potential impact on the franchisee's future business opportunities.