Is a Buildingstars franchisee prohibited from communicating or divulging sales information after the termination of the franchise agreement?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
FRANCHISEE shall not, during the term of this Agreement, or after the Transfer, termination or expiration, communicate or divulge to anyone, any information or knowledge concerning the products, services, standards, procedures, techniques, sales information, profit margins, marketing procedures, expansion plans, Customers, rates, fees and terms, databases, or such other information that gives BUILDINGSTARS' Affiliate, BUILDINGSTARS and FRANCHISEE a competitive advantage over those who do not know it, and other information or material which BUILDINGSTARS may designate as confidential, nor shall FRANCHISEE disclose or divulge in whole or in part any trade secrets or operating procedures of BUILDINGSTARS or its Affiliates, Customer lists, Customer contracts, sales and promotional information, employee lists, supplier and vendor information, information regarding real property management companies or commercial real estate owners affiliated with or related to any Customer, customer account, or any commercial real estate for which BUILDINGSTARS, its Affiliates, FRANCHISEE or any other franchisee has provided commercial cleaning services; pricing information; financial information furnished or disclosed to FRANCHISEE by BUILDINGSTARS or its Affiliates and any other information with respect to BUILDINGSTARS, unless such information is generally known and in the public domain, and except to the extent necessary to operate the Business ("Confidential Information"). FRANCHISEE will exercise the highest degree of diligence and make every effort to maintain the absolute confidentiality of all trade secrets and proprietary rights during and after the term of this Agreement and will endeavor to insure that its employees will also comply.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, a franchisee is prohibited from communicating or divulging sales information after the termination of the franchise agreement. The agreement states that the franchisee shall not communicate or divulge to anyone any information or knowledge concerning sales information. This restriction applies during the term of the agreement and after its transfer, termination, or expiration.
This means that after the franchise agreement ends, a former Buildingstars franchisee cannot share sales information with anyone, including competitors. This restriction is in place to protect Buildingstars' competitive advantage and confidential business information. The definition of confidential information also extends to customer lists, contracts, pricing information, and financial details.
The franchisee must maintain the confidentiality of trade secrets and proprietary rights both during and after the agreement. This obligation extends to ensuring that their employees also comply with these confidentiality requirements. This is a standard practice in franchising to protect the franchisor's proprietary information and maintain a competitive edge.
Given this clause, prospective Buildingstars franchisees should carefully consider the implications of these confidentiality obligations. They should understand that their ability to use or share information gained during their time as a franchisee will be restricted even after they leave the Buildingstars system. This could impact their future business ventures, particularly if they remain in the commercial cleaning industry.