After receiving written notice from Buildingstars, is a franchisee required to comply with any modified covenant?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
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 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, Buildingstars has the right to reduce the scope of any covenant contained in Sections IX and X of the franchise agreement without the franchisee's consent. This modification becomes effective immediately upon the franchisee's receipt of written notice from Buildingstars. The franchisee is then required to comply with the covenant as it has been modified.
This clause provides Buildingstars with the flexibility to adjust the restrictions placed on franchisees, particularly concerning non-compete and non-solicitation agreements, to protect its business interests. These changes can be made without needing the franchisee's prior approval.
For a prospective Buildingstars franchisee, this means that the terms of their franchise agreement, specifically Sections IX and X, can be altered by Buildingstars during the term of the agreement. It is important for franchisees to understand that they must comply with these changes as soon as they receive written notice. Failure to comply could result in legal action, including injunctive relief, as Buildingstars retains the right to seek such remedies for violations or threatened violations of these covenants.
This type of clause is not uncommon in franchise agreements, as it allows franchisors to adapt to changing market conditions and protect their brand and customer relationships. However, franchisees should carefully consider the potential impact of such unilateral modifications on their business operations and profitability.