What happens if a valid applicable law limits Buildingstars' rights of rescission or termination?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
If any valid applicable law or regulation [in effect at the time this Agreement is executed] of a governmental authority having jurisdiction over this Agreement limits BUILDINGSTARS' rights of rescission or termination or require longer notice periods than set forth herein, this Agreement shall be deemed amended to conform to the minimum notice periods or restrictions upon rescission or termination required by such laws or regulations.
The provisions of this Agreement which conflict with the applicable law shall (only to the extent not in accordance with applicable law) be ineffective, and in their stead, BUILDINGSTARS shall comply with applicable law respecting each of said matters.
BUILDINGSTARS shall not, however, be precluded from contesting the validity, enforceability, or applicability of such laws or regulations in any action relating to this Agreement or to its rescission or termination.
If a state regulator requires an amendment to this Agreement, the amendment is attached hereto as a State Law Addendum as Exhibit IV.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, if a valid law or regulation limits Buildingstars' rights to rescind or terminate the franchise agreement, or requires longer notice periods, the agreement will be amended to comply with the minimum requirements of that law or regulation. This ensures that the franchise agreement adheres to the legal standards in place at the time of execution.
This provision means that Buildingstars cannot enforce terms in its franchise agreement that are less favorable to the franchisee than what is mandated by applicable laws. For example, if a state law requires a 60-day notice period for termination, and the original agreement stipulates only 30 days, the agreement is automatically adjusted to the 60-day requirement in that jurisdiction.
However, Buildingstars retains the right to contest the validity, enforceability, or applicability of such laws or regulations. This allows Buildingstars to challenge legal requirements they believe are unfounded or misapplied, even while adhering to them in the interim. If a state regulator requires a specific amendment to the agreement, it will be included as a State Law Addendum.
In practical terms, this clause provides a degree of protection for the franchisee, ensuring that local and state laws take precedence over the standard terms of the franchise agreement where those laws provide greater protection or establish stricter requirements. Franchisees should be aware of the specific laws in their jurisdiction that may affect the terms of their franchise agreement with Buildingstars.