How does Buildingstars collect the Account Sales Fee from the Buildingstars franchisee?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
BUILDINGSTARS or if FRANCHISEE is willing to accept a new customer account from BUILDINGSTARS, FRANCHISEE must pay BUILDINGSTARS an Account Sales Fee of four hundred percent (400%) of the Monthly Contract Revenue which is generated from the new customer account. The Account Sales Fee is payable in full even if FRANCHISEE loses the new customer account for any reason, however, BUILDINGSTARS will replace the lost new customer account only under the terms and conditions set forth in Section VI.J. below.
The Account Sales Fee is payable in cash or in the following manner:
- FRANCHISEE may request new customer accounts in increments of $1,000 of Monthly Contract Revenue. At such time as FRANCHISEE submits said request, FRANCHISEE shall pay BUILDINGSTARS $200 per $1,000 Monthly Contract Revenue it requested. This will serve as the
first monthly payment under the Promissory Note that finances the Account Sales Fee. The amount of the Promissory Note will be 400% of the Monthly Contract Revenue. The Promissory Note will be payable without interest in 20 equal monthly installments. For example, if FRANCHISEE requests new customer accounts which would generate $2,000 in Monthly Contract Revenue, it would pay $400 (1/20 of $2,000 x 400%) ("Monthly Payment") and sign a Promissory Note guaranteed by the Guarantors under this Agreement which will contain substantially the same terms and conditions as set forth in Exhibit III attached hereto. The second monthly payment will be due after the first full month FRANCHISEE has provided service to said new customer account. BUILDINGSTARS may withhold the monthly Promissory Note payments from the amount of billings BUILDINGSTARS collects for the FRANCHISEE, as more fully described in Section VI.D below. A default under the Promissory Note shall also be deemed a default under this Agreement.
- BUILDINGSTARS may, but is not required to, offer FRANCHISEE new customer accounts. If FRANCHISEE decides to accept the new customer account, which decision is solely within the FRANCHISEE'S discretion, FRANCHISEE must either pay the Account Sales Fee in cash or execute a Promissory Note guaranteed by the Guarantors under this Agreement substantially in the form set forth in Exhibit III for the amou
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, the Account Sales Fee is collected in a few different ways. If a Buildingstars franchisee requests or accepts a new customer account from Buildingstars, they must pay an Account Sales Fee. The amount of this fee is either two hundred percent (200%) or four hundred percent (400%) of the Monthly Contract Revenue generated by the new customer account, depending on which section of the document you are reading. This fee is payable in full, even if the franchisee loses the new customer account. However, Buildingstars may replace the lost account under certain conditions.
The Account Sales Fee can be paid in cash or financed through a Promissory Note. If financed, the franchisee may request new customer accounts in increments of $1,000 of Monthly Contract Revenue. When the franchisee submits the request, they pay Buildingstars $200 (if the Account Sales Fee is 400%) for every $1,000 of Monthly Contract Revenue requested, which serves as the first monthly payment under the Promissory Note. The Promissory Note will be for 400% of the Monthly Contract Revenue and is payable in 20 equal monthly installments without interest. Buildingstars may also offer new customer accounts, and if the franchisee accepts, they must pay the Account Sales Fee in cash or execute a Promissory Note.
Buildingstars is authorized to deduct fees, including the Account Sales Fee, from payments Buildingstars collects from customers. This deduction also covers other fees outlined in Sections III and IV of the agreement, insurance payments, and out-of-pocket costs incurred by Buildingstars in enforcing payments. Franchisees are also obligated to deliver any money collected from their customers immediately to Buildingstars. If an audit reveals underreported Gross Sales, the franchisee will be responsible for reimbursing Buildingstars for the deficient Account Sales Fees, Administration Fees, Royalty Fees, and Insurance Program Fees, plus interest.