What restrictions on territory (Item 12) affect the franchisee's obligations regarding non-competition covenants (Item 9)?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
You must pay the travel and living expenses and wages for yourself and your employees.
ITEM 12. TERRITORY
You are granted the right to operate your Business in accordance with the terms of the Franchise Agreement. You will provide cleaning to customers only within the St. Louis, Chicago, Phoenix, Houston, Dallas, Charlotte, Pittsburgh, Tampa, Atlanta, Nashville, Raleigh-Durham, Kansas City, or San Antonio metropolitan area or the State of New Jersey, depending on which is the closest metropolitan area to where you live. You are not required to have a business location. For that reason, there are no restrictions regarding relocation or additional outlets.
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. You cannot interfere with, service or solicit customers of ours, any of our Affiliates or their franchisees, licensees or independent contractors.
We and our Affiliates retain all the rights to operate and to franchise or license to third parties the rights to operate businesses using the Systems and/or Marks anywhere. We and our Affiliates are also authorized to sell some or all of the products and services authorized for sale by the Business in any channel of distribution, including wholesale sale of products and/or to provide consulting services using the Systems and/or Marks anywhere. We are not required to pay you if we exercise any of these rights specified above.
You have no options, rights of first refusal, or similar rights to acquire additional franchises. Although we and our Affiliates have the right to do so, we and our affiliates have not operated or franchised and have no plans to operate or franchise other businesses selling or leasing similar products or services under different trademarks.
If you operate a Corporate Program, then after the first 12 months of operating a Corporate Program, you must generate at least $20,000 in Monthly Contract Revenue each month (the "Minimum Revenue Requirement"). If you fail to generate the Minimum Revenue Requirement in any month after the first 12 months of operations, then in addition to all other rights and remedies available to us, we may modify your Area or terminate your Franchise Agreement.
You are restricted from soliciting or accepting orders from outside of your
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, Item 12 outlines the territorial rights granted to franchisees and how these rights interact with non-competition obligations detailed in Item 9. Buildingstars franchisees are granted the right to operate their business within specific metropolitan areas such as St. Louis, Chicago, Phoenix, Houston, Dallas, Charlotte, Pittsburgh, Tampa, Atlanta, Nashville, Raleigh-Durham, Kansas City, or San Antonio, or the State of New Jersey, depending on proximity to the franchisee's residence.
However, Buildingstars franchisees do not receive an exclusive territory, which means they may face competition from other franchisees, company-owned outlets, or other distribution channels controlled by Buildingstars. Franchisees are explicitly prohibited from interfering with, servicing, or soliciting customers of Buildingstars, its affiliates, or their respective franchisees, licensees, or independent contractors. Buildingstars and its affiliates retain the right to operate and franchise the Buildingstars system anywhere, including selling products and services through any distribution channel, without any obligation to compensate the franchisee.
Furthermore, Buildingstars franchisees are restricted from soliciting or accepting orders from outside their designated area and cannot use other distribution channels to make sales outside or inside their area. These territorial restrictions directly impact the non-competition covenants, as franchisees are bound to operate within these limitations and avoid actions that could jeopardize Buildingstars' relationships with its customers. The agreement specifies that Buildingstars intends to restrict franchisee activities under Sections IX and X of the agreement only to the extent necessary to protect Buildingstars' legitimate business interests.
Buildingstars retains the right to modify the franchisee's area or even terminate the Franchise Agreement if the franchisee operates a Corporate Program and fails to meet a minimum revenue requirement of $20,000 in Monthly Contract Revenue after the first 12 months of operation. This revenue requirement and the potential consequences of not meeting it further tie territorial rights to the franchisee's obligations under the non-competition covenants, as failure to maintain the required revenue can lead to loss of territory or the franchise itself.