Does Buildingstars have the right to reduce the scope of any covenant contained in Sections IX and X of the Buildingstars agreement?

According to Buildingstars's 2025 Franchise Disclosure Document, Buildingstars retains the right to reduce the scope of any covenant within Sections IX and X of the franchise agreement. This can be done without the franchisee's consent. Buildingstars must provide written notice to the franchisee, which becomes effective immediately upon receipt. The franchisee is then obligated to comply with the modified covenant.

Sections IX and X of the Buildingstars agreement likely contain covenants related to non-competition, non-solicitation, or confidentiality. This clause allows Buildingstars to adjust these restrictions if they are deemed too broad or unnecessary for protecting their business interests. This could benefit a franchisee if Buildingstars reduces a geographic restriction, allowing the franchisee to operate in a previously prohibited area.

However, this also carries potential risks. Buildingstars could modify covenants in a way that benefits them but disadvantages the franchisee. For example, they might reduce the scope of a non-compete agreement for one franchisee while enforcing a stricter version for others. Franchisees should seek legal counsel to fully understand the implications of these sections and how they might affect their business operations.

This type of clause is not uncommon in franchise agreements, as franchisors often need flexibility to adapt to changing market conditions or legal interpretations. However, franchisees should carefully consider the potential impact of such clauses and negotiate for reasonable limitations where possible.