Does Buildingstars grant exclusive territories to its franchisees?
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 Buildingstars' 2025 Franchise Disclosure Document, the franchise agreement grants a nonexclusive right and license to operate within a defined area. Specifically, Buildingstars franchisees operate within a metropolitan area outlined in an exhibit to the agreement. This area is referred to as the "Area."
However, the agreement explicitly states that Buildingstars and its affiliates retain the right to operate, franchise, or license businesses using the Buildingstars system and marks anywhere, including within the franchisee's designated "Area." This means that Buildingstars can establish other franchises or operate company-owned businesses in direct competition with a franchisee, even within their primary operating area. Buildingstars and its affiliates can also operate similar businesses under different brand names or systems.
Furthermore, Buildingstars and its affiliates are authorized to sell products and services through any distribution channel, including wholesale, management, and consulting services, regardless of a franchisee's territory. This lack of territorial exclusivity is a significant factor for potential franchisees to consider, as it introduces the risk of direct competition from the franchisor and its affiliates within their own market area.