Does the Buildingstars franchise agreement grant an exclusive right to use the Buildingstars marks?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
Records and Reports. FRANCHISEE agrees to furnish to BUILDINGSTARS financial reports as shall be requested by BUILDINGSTARS from time to time pursuant to or in connection with this Agreement or as specified in the Confidential Operations Manual. FRANCHISEE shall establish a business checking account and will continue to maintain a business checking account throughout the term of this Agreement.
VIII. PROPRIETARY MARKS
A. Right to Use Marks. FRANCHISEE acknowledges that "Buildingstars" is a valid service and/or trademark, which is licensed to BUILDINGSTARS. FRANCHISEE recognizes that valuable goodwill is attached to the Marks, and that it will use the same only in the manner and to the extent specifically licensed by this Agreement. Any goodwill arising out of FRANCHISEE'S use of the Marks inures to the benefit of BUILDINGSTARS and BUILDINGSTARS' Affiliates. FRANCHISEE further acknowledges that the right to use said Marks and the grant contained in this Agreement is nonexclusive, and that BUILDINGSTARS and/or its Affiliates, in their sole discretion, have the right themselves to operate businesses under said Marks on any terms and conditions BUILDINGSTARS deems fit. Any unauthorized use of the Marks by the FRANCHISEE in any medium whatsoever is a breach of this Agreement and an infringement of the rights of BUILDINGSTARS. FRANCHISEE agrees that the unauthorized use of BUILDINGSTARS' Marks will constitute irreparable harm to BUILDINGSTARS, and FRANCHISEE expressly waives any requirement that BUILDINGSTARS post security in order to obtain injunctive relief in connection with such use. All provisions of this Agreement applicable to the Marks apply to any additional trademarks, service marks, and commercial symbols hereafter authorized for use by and licensed to the FRANCHISEE.
- B. Contest of Marks. FRANCHISEE will not directly or indirectly contest or aid in contesting the validity or ownership of the Marks, trade secrets, methods, procedures and advertising techniques which are part of the System, or contest BUILDINGSTARS' and BUILDINGSTARS' Affiliates' right to register, use or license others to use such names and Marks, trade secrets, methods, procedures and techniques. FRANCHISEE will not at any time (whether during the term of this Agreement or after expiration or termination thereof) directly or indirectly commit an act of infringement. FRANCHISEE agrees to promptly notify BUILDINGSTARS of any claim, demand, or suit based upon or arising from any attempt by anyone else to use the Marks, or any colorable variation thereof. BUILDINGSTARS or BUILDINGSTARS' Affiliates shall have the sole discretion to determine if they will defend the use of the Marks, and they are not obligated to defend the Marks. BUILDINGSTARS or BUILDINGSTARS' Affiliates have the right to control any administrative proceeding or litigation involving the Marks. FRANCHISEE shall execute any and all instruments and documents, render assistance, and do such acts as may, in the opinion of BUILDINGSTARS' counsel, be necessary or advisable to protect the interests of BUILDINGSTARS or its Affiliates in any such litigation, or proceedings, or to otherwise protect and maintain the interest of BUILDINGSTARS or its Affiliates in the Marks.
- C. Change of Marks.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, the franchise agreement does not grant franchisees an exclusive right to use the Buildingstars marks. The agreement specifically states that the rights granted to the franchisee are nonexclusive. Buildingstars and its affiliates retain the right to operate businesses under the Buildingstars marks on any terms they deem fit. This means that Buildingstars can operate or franchise similar businesses, even within the franchisee's designated area.
This non-exclusive grant has significant implications for prospective Buildingstars franchisees. It means that Buildingstars could establish company-owned locations or award additional franchises in the same area where a franchisee operates. This could lead to increased competition and potentially impact the franchisee's ability to grow their customer base and revenue. The franchisee's agreement only provides a nonexclusive right and license to use the System and Marks in connection with the operation of the Business under Buildingstars' "On-Site Manager Program".
Furthermore, Buildingstars retains the right to license to third parties the right to operate businesses using the System and/or Marks anywhere, including within and outside of the Area. Buildingstars, its Affiliates and other franchisees and licensees are also permitted to operate or license others to operate businesses similar to or the same as the Business under different Marks or the System or different systems anywhere, including within and outside of the Area. Buildingstars and its Affiliates are also authorized to sell some or all of the products and services authorized for sale by the Business in any channel of distribution, including but not limited to the wholesale sales of products and/or to provide management and/or consulting services using the System and/or the Marks.
Prospective franchisees should carefully consider the implications of this non-exclusive arrangement and how it might affect their business. It is important to assess the competitive landscape in their target area and understand Buildingstars's plans for future expansion. Franchisees should also inquire about any potential restrictions or limitations on Buildingstars's ability to operate or franchise competing businesses in the same area.