Does the Buildingstars Franchise Agreement require all covenants to be interpreted reasonably?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
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 restrictive covenant, shall be interpreted and applied consistent with the requirements of reasonableness and equity.
Source: Item 23 — RECEIPT (FDD pages 43–217)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, the Franchise Agreement includes a provision regarding the interpretation of covenants. Specifically, all covenants within the agreement, including those related to restrictive covenants, must be interpreted and applied in a manner consistent with reasonableness and equity. This clause aims to ensure fairness in the enforcement of the agreement's terms.
This provision is important for prospective Buildingstars franchisees because it provides a safeguard against overly strict or unreasonable interpretations of the agreement by Buildingstars. It means that if a dispute arises over a particular covenant, a court or other decision-maker should consider what is fair and reasonable in the context of the specific situation. This can be particularly relevant for restrictive covenants, which often limit a franchisee's activities after the franchise relationship ends.
However, it's also important to note that the agreement also includes provisions that may impact a franchisee's rights and remedies. For example, Buildingstars is not obligated to inform the franchisee of any federal, state, municipal, or local law, rule, regulation, ordinance code, or tax. Additionally, the agreement specifies that Buildingstars has the right to exercise its own judgment on various matters and to approve or disapprove franchisee requests in its sole and absolute discretion. While the reasonableness clause provides some protection, franchisees should carefully review the entire agreement to understand the full scope of their obligations and Buildingstars's rights.
Furthermore, Buildingstars includes a clause that they intend to restrict the activities of the franchisee under Sections IX and X of this Agreement only to the extent necessary for the protection of Buildingstars' legitimate business interests. The covenants shall be construed as severable and independent and shall be interpreted and applied consistent with the requirements of reasonableness and equity. In the event a court of competent jurisdiction shall determine the business, time, or geographic limitations contained in this Agreement are illegal, invalid or unenforceable, then, the court so holding shall reduce the limitation necessary to render such restriction enforceable by such court. Buildingstars shall have the right to reduce the scope of any covenant contained in Sections IX and X, without franchisee's consent, effective immediately upon receipt by franchisee of written notice thereof; and franchisee shall comply with any covenant as so modified.