What is a Buildingstars franchisee prohibited from doing with respect to customers of Buildingstars, its affiliates, or their franchisees, independent contractors or licensees?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
pon disability or transfer upon the death of a majority owner; (e) the grant or creation of any lien or encumbrance (f) any sale, lease, sublease, or other transfer or disposition of any of the assets used in the performance of the Business, whether now owned or hereafter acquired, except in the normal and ordinary course of business; or (g) any change of control or management of the Business.
II. GRANT
- A. Area. Subject to the terms and conditions of this Agreement, BUILDINGSTARS hereby grants to FRANCHISEE the nonexclusive right and license to use the System and Marks in connection with the operation of the Business under BUILDINGSTARS' "On-Site Manager Program". FRANCHISEE will operate the Business only within the metropolitan area listed in Exhibit I attached hereto ("Area"). FRANCHISEE shall not interfere with, service, or solicit Customers of BUILDINGSTARS, any of BUILDINGSTARS' Affiliates, or their franchisees, licensees, or independent contractors.
- B. Rights Reserved by BUILDINGSTARS and Affiliates. BUILDINGSTARS and its Affiliates retain the right to operate and to franchise or license to third parties the right to operate businesses using the System and/or Marks anywhere, including within and outside of the Area.
Source: Item 23 — RECEIPT (FDD pages 43–217)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, a franchisee is restricted from interfering with, servicing, or soliciting customers of Buildingstars, its affiliates, or their franchisees, independent contractors, or licensees. This restriction is in place to protect Buildingstars's business interests and relationships.
This means a Buildingstars franchisee cannot actively pursue or accept business from existing customers of the Buildingstars network. This includes not only Buildingstars's direct clients but also those serviced by its affiliates, other franchisees, independent contractors, and licensees. The franchisee's right to operate is nonexclusive and limited to the metropolitan area outlined in their agreement.
Buildingstars retains the right to operate and franchise or license to third parties the right to operate businesses using the System and/or Marks anywhere. 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.
This provision ensures that Buildingstars can expand and diversify its services without being restricted by existing franchise agreements. It also clarifies that Buildingstars and its affiliates can operate similar businesses under different brands or systems, even within a franchisee's territory. This could create competition for the franchisee, but it also allows Buildingstars to adapt to changing market conditions and customer needs.