What are the Buildingstars restrictions on the franchisee's business location (Item 12) and how does this relate to the franchisee's obligations regarding termination (Item 9)?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
notifying any Customer of FRANCHISEE'S new affiliation or employment;
- b. Contact or solicit, attempt to contact or solicit, or participate or aid in the contact or solicitation of, any Service Provider for the purpose of inducing or encouraging him, her or it to terminate or materially alter their employment, engagement, franchise relationship or other business relationship with BUILDINGSTARS, any Affiliate, or other franchisee;
- c. Do or take any action to circumvent or otherwise attempt to take away or interfere with or jeopardize the business relationship between the Customer and BUILDINGSTARS. FRANCHISEE acknowledges and agrees any interference with the Customer's business or the relationship between BUILDINGSTARS and Customers is in direct violation of this provision.
- C. Reasonableness of Restrictions. BUILDINGSTARS intends to restrict the activities of the FRANCHISEE under Sections IX and X of this Agreement only to the extent necessary for the protection of BUILDINGSTARS' legitimate business interests. For the sake of clarity, nothing herein is to restrict FRANCHISEE from providing janitorial/cleaning services to any entity or person that is not a Customer; provided however, that the foregoing shall not alter FRANCHISEE's obligations, including but not limited to Section IX above, under this Agreement. The foregoing covenants shall be construed as severable and independent and shall be interpreted and applied consistent with the requirements of reasonableness and equity. In the event a court of competent jurisdiction shall determine the business, time, or geographic limitations contained in this Agreement are illegal, invalid or unenforceable, then, the
court so holding shall reduce the limitation necessary to render such restriction enforceable by such court. 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.
The terms of this Section X are assignable by BUILDINGSTARS and shall inure to the benefit of BUILDINGSTARS, as well as its successors and assigns. In the event of any assignment, sale, merger or change in ownership or structure of BUILDINGSTARS, the resulting entity shall step into the place of BUILDINGSTARS, without any additional consent of or notice to FRANCHISEE, as if the term BUILDNGSTARS were defined in this Agreement to include such entity.
XI. DEFAULT AND TERMINATION
A. Termination by BUILDINGSTARS.
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- 30 Day Opportunity to Cure BUILDINGSTARS may at its option, and without prejudice to any other rights or remedies provided for in this Agreement or at law or in equity, terminate this Agreement for "good cause". (Provided that state law permits BUILDINGSTARS to terminate earlier if the "good cause" constitutes a default which is not curable). Without limitation as to other situations, good cause for termination also exists if FRANCHISEE or any guarantor of this Agreement:
- (1) Does not perform any and all of the lawful terms, conditions, and obligations of this Agreement, or the Confidential Operations Manual; or
- (2) Commits any other act which constitutes good cause under applicable state law or court decisions; or
- (3) Engages in any illegal, fraudulent, unfair or deceptive business practice, which, in the opinion of BUILDINGSTARS, adversely affects the operation, maintenance, or goodwill of the franchise; or
- (4) Fails to operate the Business for a period of three (3) consecutive days without justifiable cause; or
- (5) Diverts or collects any fees from Customers in violation of Section VI.D., above which provide that customer billings and collections are to be done by BUILDINGSTARS; or
- (6) Fails to properly service Customers in accordance with BUILDINGSTARS' standards and within the spirit and intent of this Agreement.
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, Item 12 discusses the Confidential Operations Manual, but does not specify any restrictions on the franchisee's business location. However, the FDD does state that franchisees must cease providing services to all customers and forfeit any rights to customer accounts upon termination. Buildingstars has the right to service these accounts or assign them to others. The franchisee cannot terminate a written contract without providing Buildingstars with prior notice. These obligations remain in effect even after termination of the franchise agreement.
Buildingstars franchisees are restricted from interfering with the relationship between Buildingstars and its customers. Specifically, franchisees cannot take actions that would jeopardize the business relationship between a customer and Buildingstars. This restriction is considered a direct violation of the franchise agreement. However, franchisees are not restricted from providing janitorial/cleaning services to entities or persons who are not Buildingstars customers.
Upon termination of the Buildingstars franchise agreement, the franchisee must discontinue using all signs, marks, colors, structures, printed goods, and advertising forms that indicate Buildingstars' business. They must also return any copyrighted materials provided by Buildingstars and assign their telephone numbers to Buildingstars if requested. All confidential information, including the Confidential Operation Manual, must be returned immediately. The franchisee's obligations regarding trade secrets, confidential information, and restrictive covenants remain in effect even after termination.