Which obligations of the Buildingstars franchisee remain in effect even after termination of the franchise agreement?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
TARS requests, shall assign its telephone numbers to BUILDINGSTARS and execute any and all documents necessary to do so. Further, FRANCHISEE shall pay all amounts due to BUILDINGSTARS, BUILDINGSTARS' Affiliates, and suppliers. Further, FRANCHISEE agrees to return any and all materials which contain Confidential Information in whatever form, including but not limited to the Confidential Operation Manual, to BUILDINGSTARS immediately. FRANCHISEE'S obligations regarding Trade Secrets and Confidential Information and Non-Solicitation and Non-Competition shall remain in full force and effect in accordance with their terms, notwithstanding such termination.
FRANCHISEE will immediately cease providing services to all Customers and forfeit all rights it has to the customer accounts.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, certain obligations of the franchisee survive the termination of the franchise agreement. Specifically, the franchisee's duties regarding trade secrets, confidential information, non-solicitation, and non-competition remain in full effect, as defined by their original terms, even after the franchise agreement ends. This means that even after a franchisee is no longer operating under the Buildingstars brand, they are still legally bound to protect Buildingstars' proprietary information and refrain from actions that could unfairly compete with or solicit business away from Buildingstars.
Additionally, the franchisee is obligated to pay all amounts due to Buildingstars, its affiliates, and suppliers. This ensures that any outstanding financial obligations are fulfilled, regardless of the termination. The franchisee must also adhere to the terms outlined in section G, which states that if the franchisee performs services for a Buildingstars customer outside of the franchise agreement within one year of termination, they must pay Buildingstars a fee equal to three times the monthly amount agreed to be paid for such services.
These stipulations are typical in franchise agreements to protect the franchisor's interests and maintain the integrity of the brand. Prospective Buildingstars franchisees should carefully review these post-termination obligations to understand the full scope of their responsibilities, even after the franchise relationship concludes. Understanding these obligations is crucial for planning future business activities and avoiding potential legal issues with Buildingstars after the franchise agreement is terminated.