If a restriction in the Buildingstars Franchise Agreement is too broad, can it be modified by a court?
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 any restriction within the Franchise Agreement is considered too broad to be enforced, a court with the proper authority is allowed to modify or limit the restriction. This modification would only go as far as what is needed to allow the restriction to be enforced. The agreement also states that all agreements, including those relating to restrictive covenants, will be interpreted and applied in a way that is reasonable and equitable.
This means that if a Buildingstars franchisee feels a specific restriction, such as a non-compete clause, is overly broad and prevents them from earning a livelihood, they can challenge it in court. The court then has the power to adjust the restriction to make it fairer while still protecting Buildingstars's legitimate business interests. This clause aims to strike a balance between protecting the franchisor's business and ensuring the franchisee's ability to work.
Buildingstars also states its intent to restrict franchisees' activities only to the extent necessary to protect its legitimate business interests. If a court determines that the business, time, or geographic limitations in the agreement are illegal, invalid, or unenforceable, the court can reduce the limitation to make it enforceable. Buildingstars also has the right to reduce the scope of any covenant without the franchisee's consent, effective immediately upon written notice to the franchisee. This provides Buildingstars with some flexibility to adjust restrictions as needed.
This clause offers a degree of protection for potential Buildingstars franchisees, ensuring that overly restrictive terms in the agreement can be reviewed and modified by a court. It also highlights Buildingstars's intention to impose restrictions only to the extent necessary for protecting its business interests, which can be a positive sign for franchisees concerned about potential limitations on their activities.