factual

Does the Buildingstars definition of 'Customer' include entities affiliated with the customer?

Buildingstars Franchise · 2025 FDD

Answer from 2025 FDD Document

C. "Customer" means any existing customers or prospective customers (of BUILDINGSTARS, its Affiliates, FRANCHISEE, or any other franchisee) with whom FRANCHISEE or its employees or agents have had direct or indirect contact or about whom FRANCHISEE or its employees or agents have learned information by virtue of: (1) communications with BUILDINGSTARS, its Affiliates or other BUILDINGSTARS franchisees; (2) the operation of the Business; or (3) the transfer or termination of this Agreement, and in addition, "Customer" shall include any affiliate, successor in interest, subsidiary, sibling company, or parent company of any such customer or prospective customer.

Source: Item 22 — CONTRACTS (FDD page 43)

What This Means (2025 FDD)

According to Buildingstars's 2025 Franchise Disclosure Document, the definition of "Customer" is broad and explicitly includes entities affiliated with the customer. Specifically, the definition encompasses not only existing and prospective customers of Buildingstars, its affiliates, franchisees, or any other franchisee, but also extends to any affiliate, successor in interest, subsidiary, sibling company, or parent company of such customers or prospective customers. This definition applies to those with whom the franchisee or their employees have had direct or indirect contact, or about whom they have learned information through communications with Buildingstars, its affiliates, other franchisees, the operation of the business, or the transfer or termination of the Franchise Agreement.

This expansive definition has significant implications for a Buildingstars franchisee. It means that the franchisee's obligations and restrictions, such as non-solicitation agreements, extend not only to the specific entity they directly serve but also to its broader network of affiliated companies. This could limit the franchisee's ability to expand their business independently, as they are restricted from soliciting or providing services to related entities of their existing customers.

The definition also clarifies that information learned about a customer or prospective customer through the Buildingstars network, or during the operation of the business, is subject to the same restrictions. This prevents a franchisee from leveraging knowledge gained during their time with Buildingstars to benefit a competing business or to solicit customers independently after leaving the franchise system.

For a prospective franchisee, it is crucial to understand the full scope of this definition and its potential impact on their business operations and future opportunities. They should carefully consider how this broad definition of "Customer" might affect their ability to grow their business and what restrictions it places on their activities both during and after their time as a Buildingstars franchisee.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.