What happens if a court determines the limitations in the Buildingstars agreement are unenforceable?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event a court of competent jurisdiction shall determine the business, time, or geographic limitations contained in this Agreement are illegal, invalid or unenforceable, then, the court so holding shall reduce the limitation necessary to render such restriction enforceable by such court. BUILDINGSTARS shall have the right to reduce the scope of any covenant contained in Sections IX and X, without FRANCHISEE'S consent, effective immediately upon receipt by FRANCHISEE of written notice thereof; and FRANCHISEE shall comply with any covenant as so modified. In addition to any other remedies available at law or equity, BUILDINGSTARS shall have the right to injunctive relief for a violation or threatened violation of the foregoing. FRANCHISEE acknowledges that the restrictions imposed in this Section are reasonable and their enforcement will not cause an undue burden upon FRANCHISEE'S ability to earn a livelihood.
Source: Item 23 — RECEIPT (FDD pages 43–217)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, if a court finds any of the business, time, or geographic limitations within the franchise agreement to be illegal, invalid, or unenforceable, the court is authorized to reduce the limitation to the extent necessary to make it enforceable. This ensures that the restrictive covenants, such as those related to non-competition, are interpreted and applied reasonably and equitably.
Buildingstars also retains the right to reduce the scope of any covenant in Sections IX and X of the agreement without the franchisee's consent. This modification becomes effective immediately upon the franchisee receiving written notice. The franchisee is then obligated to comply with the covenant as modified. This provision allows Buildingstars to adjust the restrictions to protect its business interests while ensuring the franchisee can still earn a livelihood.
This clause provides Buildingstars with flexibility in enforcing restrictive covenants, as it can unilaterally reduce the scope of these covenants if they are deemed too broad. It also protects Buildingstars' interests by allowing a court to modify the restrictions to make them enforceable, rather than invalidating them entirely. Franchisees should be aware of these provisions, as they could be subject to modified restrictions during the term of their agreement.