What actions can Buildingstars take if a franchisee fails to meet the Minimum Revenue Requirement?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
d fully paid license to use and sublicense the use of the ideas, concepts, techniques or materials.
- H. Financial Records and Reports. FRANCHISEE agrees to furnish to BUILDINGSTARS financial reports as shall be requested by BUILDINGSTARS from time to time pursuant to or in connection with this Agreement or as specified in the Confidential Operations Manual. FRANCHISEE shall establish a business checking account and will continue to maintain a business checking account throughout the term of this Agreement.
- I. Minimum Revenue Requirement. Commencing as
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, beginning in the 13th month of operation, a franchisee must generate at least $20,000 in Monthly Contract Revenue (the Minimum Revenue Requirement). If a Buildingstars franchisee fails to meet this minimum in any month, Buildingstars has the right to modify the franchisee's area or terminate the Franchise Agreement. Importantly, Buildingstars can take these actions without providing the franchisee an opportunity to correct the deficiency.
This is a significant point for prospective franchisees to consider. The franchisor has the power to modify the franchisee's territory, which could impact their ability to generate revenue, or terminate the agreement entirely if the minimum revenue is not met. The fact that Buildingstars does not have to offer an opportunity to cure means a franchisee could lose their franchise with no chance to improve performance.
In the franchise industry, it is more common for franchisors to provide franchisees with a cure period to address performance issues. The Buildingstars franchise agreement is stricter than average in this regard. A prospective franchisee should carefully evaluate their ability to consistently meet the $20,000 monthly revenue requirement and consider the potential consequences of failing to do so. They should also inquire about the conditions under which Buildingstars might modify a franchisee's area, as this could also impact revenue potential.