What is the formula for calculating the fee a Buildingstars franchisee must pay for breaching the non-solicitation provision?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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, if a franchisee breaches the non-solicitation provision of the franchise agreement, they will be required to pay a fee to Buildingstars. This fee is calculated as three times the monthly amount that the customer agreed to pay for services. This penalty applies if the franchisee, or their relatives or associates, directly or indirectly provides services to a customer they served or learned about through Buildingstars.
This non-solicitation clause is in effect during the term of the franchise agreement and for one year after the agreement's transfer, expiration, or termination. It also applies after a court order enforcing the covenant, whichever event occurs later. This means that even after a franchisee leaves the Buildingstars system, they are restricted from soliciting or providing services to Buildingstars customers.
For a prospective Buildingstars franchisee, this means understanding the restrictions and potential costs associated with soliciting Buildingstars customers, both during the franchise term and for one year afterward. It is important to factor in the potential financial impact of this fee when evaluating the franchise opportunity and planning for business operations after the franchise agreement ends.