During the term of the Buildingstars agreement and for one year after termination, can a franchisee's relatives provide services to Buildingstars customers?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
FRANCHISEE agrees that during the term of this Agreement and for one (1) year after the Transfer, expiration or termination for any reason of this Agreement or the entry of a final order of a court of competent jurisdiction enforcing this covenant, whichever is later, FRANCHISEE and any of its relatives, or associates, shall not, directly or indirectly, for FRANCHISEE or for any other person or entity (except BUILDINGSTARS):
- a.
Provide or attempt to provide (or others of the opportunity to provide), directly or indirectly, any Services to any Customer for which FRANCHISEE has rendered services under this Agreement or to which FRANCHISEE has been introduced by or about which FRANCHISEE has received information by being a Buildingstars franchisee.
- b.
In the event that there is a breach of this provision, Franchisee shall pay BUILDINGSTARS a fee equal to 3 times the monthly amount agreed to be paid by the Customer for the Services.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, both during the term of the agreement and for one year after its termination, a franchisee's relatives are restricted from providing services to Buildingstars customers. Specifically, the franchisee and their relatives or associates cannot directly or indirectly provide services to any customer that the franchisee has served or been introduced to through their Buildingstars franchise. This restriction applies regardless of whether the services are provided for the franchisee themselves or for another entity, excluding Buildingstars.
This non-solicitation clause is designed to protect Buildingstars' customer base and prevent franchisees from leveraging their access to customers gained through the franchise to start a competing business or work for a competitor. The restriction extends to relatives and associates to prevent franchisees from circumventing the agreement by using family members or close contacts to solicit or provide services to Buildingstars customers.
If a Buildingstars franchisee or their relatives breach this non-solicitation provision, the franchisee is obligated to pay Buildingstars a fee. This fee is calculated as three times the monthly amount that the customer agreed to pay for the services. This penalty serves as a deterrent against violating the non-solicitation agreement and compensates Buildingstars for the potential loss of revenue from the customer.
Prospective Buildingstars franchisees should carefully consider the implications of this non-solicitation clause. It restricts not only the franchisee but also their relatives and associates from providing services to Buildingstars customers both during the franchise term and for one year after termination. Understanding these restrictions is crucial for anyone considering investing in a Buildingstars franchise, as it can significantly impact their ability to operate independently in the same market after leaving the franchise system.