Under the Buildingstars franchise agreement, what specific metropolitan area is the franchisee authorized to operate the Business?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
- A. Area. Subject to the terms and conditions of this Agreement, BUILDINGSTARS hereby grants to FRANCHISEE the nonexclusive right and license to use the System and Marks in connection with the operation of the Business under BUILDINGSTARS' "On-Site Manager Program". FRANCHISEE will operate the Business only within the metropolitan area listed in Exhibit I attached hereto ("Area"). FRANCHISEE shall not interfere with, service, or solicit Customers of BUILDINGSTARS, any of BUILDINGSTARS' Affiliates, or their franchisees, licensees, or independent contractors.
- B. Rights Reserved by BUILDINGSTARS and Affiliates. BUILDINGSTARS and its Affiliates retain the right to operate and to franchise or license to third parties the right to operate businesses using the System and/or Marks anywhere, including within and outside of the Area. BUILDINGSTARS, its Affiliates and other franchisees and licensees are also permitted to operate or license others to operate businesses similar to or the same as the Business under different Marks or the System or different systems anywhere, including within and outside of the Area. BUILDINGSTARS and its 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 but not limited to the wholesale sales of products and/or to provide management and/or consulting services using the System and/or the Marks.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, the franchisee is granted a nonexclusive right and license to operate the Business under Buildingstars' "On-Site Manager Program." The specific metropolitan area where the franchisee is authorized to operate is listed in Exhibit I of the Franchise Agreement. The franchisee is prohibited from interfering with, servicing, or soliciting customers of Buildingstars, its affiliates, or their franchisees, licensees, or independent contractors. However, Buildingstars and its affiliates retain the right to operate or franchise businesses using the Buildingstars system and marks anywhere, including within or outside the franchisee's designated area. They can also operate similar businesses under different marks or systems, and sell products/services through any distribution channel, even within the franchisee's area.
This means that while a Buildingstars franchisee is given a specific metropolitan area to focus on, the rights are non-exclusive. Buildingstars retains considerable freedom to operate and license others, even in the same area. This is a common practice in franchising, but it's important for the franchisee to understand that Buildingstars can compete directly or indirectly in the same market.
Prospective franchisees should carefully review Exhibit I of the Franchise Agreement to understand the exact boundaries of their territory. They should also inquire about Buildingstars' plans for expansion or alternative distribution channels in the area to assess the potential for competition and market saturation.