Within what geographic area is a Buildingstars franchisee permitted 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's 2025 Franchise Disclosure Document, a franchisee is granted a nonexclusive right to operate their business within a specific metropolitan area. This designated area is detailed in Exhibit I of the Franchise Agreement. Buildingstars retains the right to operate or franchise businesses using the Buildingstars system and marks anywhere, including within the franchisee's designated area. Buildingstars and its affiliates can also operate similar businesses under different brands or systems, and sell products/services through any distribution channel, even within the franchisee's area.
This means that while a Buildingstars franchisee is assigned a specific metropolitan area to operate in, the rights are non-exclusive. Buildingstars and its affiliates can still operate and franchise within that same area. This could lead to increased competition for the franchisee. The franchisee is also restricted from interfering with or soliciting customers of Buildingstars, its affiliates, or other franchisees.
Prospective franchisees should carefully review Exhibit I of the Franchise Agreement to understand the exact boundaries of their operating area. They should also consider the potential for competition from Buildingstars itself, its affiliates, and other franchisees when evaluating the opportunity. It would be prudent to inquire about the criteria used to define metropolitan areas and the potential for those areas to change over time.