Under what circumstances is the one-year non-compete period extended for a Buildingstars franchisee?
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.
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.
Contact, solicit, attempt to contact or solicit, or participate or aid with the contact or solicitation of or provide or attempt to provide (or advise others of the opportunity to provide directly or indirectly any cleaning or janitorial services to any Customer for any reason other than providing services pursuant to this Agreement, including but not limited to 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;
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, the standard one-year non-compete period can be extended under specific circumstances. The franchisee agrees not to provide services to Buildingstars customers they served or were introduced to as a franchisee during the term of the agreement and for one year after the agreement's transfer, expiration, or termination.
However, the non-compete period is extended beyond one year if a court issues a final order enforcing the non-compete covenant. In this case, the one-year restriction begins from the date of that court order, effectively prolonging the period during which the franchisee is restricted from soliciting Buildingstars' customers or service providers.
This clause has significant implications for a franchisee who wishes to exit the Buildingstars system and continue operating in the same industry. It is important to note that violating the non-compete can result in the franchisee paying Buildingstars a fee equal to three times the monthly amount agreed to be paid by the customer for services.