What happens if a court finds the restrictions in the Buildingstars agreement to be overly broad?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
Should any provision of this Agreement be construed or declared invalid, such decision shall not affect the validity of any remaining portion which shall remain in full force and effect as if this Agreement had been executed with such invalid portion eliminated.
If any restriction contained in this Agreement is deemed too broad to be capable of enforcement, a court of competent jurisdiction is hereby authorized to modify or limit such restriction to the extent necessary to permit its enforcement.
All covenants contained in this Agreement, including but not limited to those relating to restrictive covenant, shall be interpreted and applied consistent with the requirements of reasonableness and equity.
Source: Item 23 — RECEIPT (FDD pages 43–217)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, if a court deems any restriction in the franchise agreement too broad to be enforceable, the court is authorized to modify or limit the restriction to the extent necessary to permit its enforcement. This ensures that the remaining portions of the agreement remain valid and in full effect, as if the agreement had been executed with the invalid portion eliminated. This clause is part of the 'Severability' provision within the franchise agreement.
This provision protects Buildingstars by allowing a court to narrow overly broad restrictions rather than invalidate them entirely. It also benefits the franchisee by ensuring that the agreement, as a whole, remains in effect, and that only the overly broad restriction is modified. This approach is consistent with general legal principles of contract interpretation, which favor upholding agreements where possible.
Furthermore, Buildingstars states its intent to restrict the franchisee's activities only to the extent necessary to protect its legitimate business interests. Buildingstars retains the right to reduce the scope of any covenant contained in Sections IX and X of the agreement without the franchisee's consent, effective immediately upon written notice to the franchisee. The franchisee must comply with any covenant as modified. This clause reinforces the reasonableness and equity of the restrictions imposed, and it acknowledges that the restrictions should not unduly burden the franchisee's ability to earn a livelihood.