Can a Buildingstars franchisee use other channels of distribution to make sales inside their area?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
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. 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.
Source: Item 12 — TERRITORY (FDD pages 26–27)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, Buildingstars franchisees are granted a nonexclusive right to operate within their designated metropolitan area. However, Buildingstars and its affiliates retain the right to sell products and services through any channel of distribution, including wholesale, management, and consulting services, even within the franchisee's area. This means that while a franchisee operates their Buildingstars business in a specific location, Buildingstars itself can also sell the same or similar services through other channels in that same area.
This reservation of rights by Buildingstars has significant implications for franchisees. It means that Buildingstars could potentially compete with its own franchisees within their territories through different sales channels. While the franchisee focuses on direct customer relationships, Buildingstars could pursue larger wholesale contracts or offer management services directly, potentially impacting the franchisee's market share and revenue.
For a prospective Buildingstars franchisee, it's crucial to understand the extent to which Buildingstars intends to utilize these alternative distribution channels within their territory. It would be prudent to inquire about Buildingstars's specific plans for wholesale, management, or consulting services in the franchisee's target market. Understanding these competitive dynamics is essential for assessing the potential profitability and long-term viability of the franchise.