Can a Buildingstars franchisee use other channels of distribution to make sales outside their area?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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. 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 the 2025 Buildingstars Franchise Disclosure Document, franchisees are granted a nonexclusive right to operate within a specified metropolitan area. Buildingstars and its affiliates retain the right to operate, franchise, or license businesses using the Buildingstars system and marks anywhere, including within and outside the franchisee's designated area. This means Buildingstars itself can engage in activities that might compete with a franchisee, even within the franchisee's territory.
Buildingstars and its affiliates are authorized to sell products and services through any channel of distribution. This includes wholesale sales, management services, and consulting, using the Buildingstars system and marks. This clause indicates that while franchisees operate within their defined area, Buildingstars reserves the right to pursue various sales channels without restriction.
In practical terms, a Buildingstars franchisee is limited to operating within their assigned territory and must not interfere with customers of Buildingstars, its affiliates, or other franchisees. However, Buildingstars retains significant rights to operate and license its system through various channels, potentially creating competition or limiting the franchisee's expansion opportunities. A prospective franchisee should consider this non-exclusivity and the potential for Buildingstars to utilize other distribution channels when evaluating the franchise opportunity.