Is a Buildingstars franchisee allowed to indirectly contest the validity of Buildingstars' trade secrets?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, franchisees are prohibited from contesting the validity of Buildingstars' trade secrets. Specifically, the franchise agreement states that franchisees cannot directly or indirectly contest or aid in contesting the validity or ownership of the Marks, trade secrets, methods, procedures, and advertising techniques that are part of the Buildingstars system. This restriction applies not only to trade secrets but also to the company's trademarks, methods, procedures, and advertising techniques.
This provision means a Buildingstars franchisee is legally bound not to challenge Buildingstars' ownership or validity of its trade secrets, whether directly through legal action or indirectly by supporting others in doing so. This obligation extends to contesting Buildingstars' right to register, use, or license these trade secrets and marks to others. The franchisee also agrees to notify Buildingstars of any claims or suits arising from attempts by others to use the marks or variations thereof.
Buildingstars retains the sole discretion to decide whether to defend the use of its marks and controls any related administrative proceedings or litigation. Franchisees are required to assist Buildingstars by executing documents and providing necessary support to protect Buildingstars' interests in such legal matters. This clause is designed to protect Buildingstars' intellectual property and maintain the integrity of its brand and operational methods.
This type of clause is relatively standard in franchise agreements, as franchisors need to protect their brand and operational methods. Prospective franchisees should understand that this clause restricts their ability to challenge Buildingstars' proprietary information and trademarks, even if they believe there may be grounds to do so. It is important to fully understand the scope of what Buildingstars considers to be trade secrets and how this restriction may impact the franchisee's business operations.