How does Buildingstars collect the Management Fee from franchisees?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
stomers. "Gross Sales" may also be referred to as "Gross Revenues."
You will pay us, by the 15th day of the month following the month in which the sales were made, a Royalty Fee and a Management Fee equal to the amount described in the chart above throughout the term of the Franchise Agreement. For example, the Management Fee for February is payable by March 15th . We will withhold the Management Fee from the amount of billings which we collect on your behalf.
For the On-Site Manager Program, you will pay a Royalty Fee of 20% instead of 10% on those Gross Sales attributable to Specialty Work. For the Corporate Program, you will pay a Royalty Fee of 30% instead of 10% on those Gross Sales attributable to Specialty Work. "Specialty Work" means project work that is above and beyond the scope of the monthly janitorial services, such as carpet cleaning, floor refinishing, window cleaning, and special projects. Franchisees in the Technician Program are not permitted to do Specialty Work.
Note 2: If you request a new customer account to service or if we offer you a new customer account which you wish to service, you must pay us an Account Sales Fee of either 150% of the Monthly Contract Revenue which is generated from the new customer account if you are an On-Site Manager Program franchisee or 300% of the Monthly Contract Revenue if you are a Corporate Program franchisee.
If you request the new customer account, which you must do in increments of $1,000 of Monthly Contract Revenue, you will pay us either the entire Account Sales Fee in cash or 1/20 of the amount of the Account Sales Fee when you submit the request which will serve as the first month's payment under the Promissory Note which you must sign. The Promissory Note is payable in 20 equal monthly installments. The second payment under the Promissory Note will be due after the first full month you have provided service to the new customer. The amount of the Promissory Note will be 200% (if you are in the On-Site Manager Program) or 400% (if you are in the Corporate Program) of the Monthly Contract Revenue.
If we offer you a new customer and you wish to accept the new customer, you will either pay us the entire Account Sales Fee in cash or execute a Promissory Note for the Account Sales Fee. This Promissory Note is payable in 20 equal monthly installments. The amount of the Promissory Note will be 200% (if you are in the On-Site Manager Program) or 400% (if you are in the Corporate Program) of the Monthly Contract Revenue. The first payment is due after the first full month you provide service to the new customer.
- Note 3: You have to reimburse us for expenses and costs we incur to remedy complaints of your customers.
- Note 4: By the 15th of every month, you must pay us an Administration Fee equal to 5% of the Gross Sales of the previous month. We will withhold the Administrative Fee from the amount of billings which we collect on your behalf.
- Note 5: Currently we are able to purchase general liability, workers compensation and employee dishonesty coverage for you.
Source: Item 6 — OTHER FEES\ (FDD pages 14–16)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, the management fee is collected by withholding it from the billings Buildingstars collects on behalf of the franchisee. The franchisee is responsible for paying the Management Fee by the 15th day of the month following the month in which the sales were made. For example, the Management Fee for February is payable by March 15th. The Management Fee varies depending on the program the franchisee is participating in.
Specifically, for the Technician Program, the Management Fee is 20% of Gross Sales. For the On-Site Manager Program, it is 10% of Gross Sales, and for the Corporate Program, it is 0% of Gross Sales. Gross Sales are defined as the total money or property earned from the operation of the business, including all fees and charges for every type of service performed and goods and services sold, calculated when the services or products are delivered or rendered. Gross Sales do not include applicable sales, use, or service taxes, or any refunds and allowances actually given to customers.
Buildingstars also deducts other fees from the franchisee's billings, including the Royalty Fee and Administration Fee. The Royalty Fee is 10% of Gross Sales, and the Administration Fee is 5% of Gross Sales. There is also an Insurance Program Fee of 3.5% of Gross Sales, if the franchisee participates in the insurance program offered by Buildingstars. These fees are also deducted on the 15th of each month.