What is the formula for calculating the fee a Buildingstars franchisee must pay for breaching the non-compete 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.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, a franchisee who violates the non-compete agreement must pay a fee to Buildingstars. This non-compete agreement is in effect during the term of the Franchise Agreement and for one year after the agreement's transfer, expiration, or termination. This also applies after a court order enforcing the covenant, whichever date is later.
Specifically, if a Buildingstars franchisee provides or attempts to provide services to any customer they previously served or were introduced to through Buildingstars, they will be in breach of the non-solicitation agreement.
In the event of such a breach, the franchisee must pay Buildingstars a fee equal to three times the monthly amount that the customer agreed to pay for the services. This calculation is based on the monthly revenue lost by Buildingstars due to the franchisee's prohibited actions.