What is the condition for Buildingstars franchisees to participate in the insurance program?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
- Note 5: Currently we are able to purchase general liability, workers compensation and employee dishonesty coverage for you. If you decide to participate in this insurance program, you will pay us by the 15th day of the month following the month in which the sales were made, an Insurance Program Fee of 3.5% of Gross Sales per month throughout the term of the Franchise Agreement. We have the right to increase the Insurance Program. We will withhold these amounts from the total billings which we collect on your behalf. The cost of the insurance is subject to change. We make this program available to qualified franchisees and will continue to do so in our sole discretion, but assume no liability in connection therewith. We reserve the right to discontinue the program at any time upon prior written notice to you.
Source: Item 6 — OTHER FEES\ (FDD pages 14–16)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, participation in the insurance program is available to qualified franchisees at Buildingstars's sole discretion. If a franchisee decides to participate in the insurance program, they must pay an Insurance Program Fee of 3.5% of Gross Sales per month. This payment is due by the 15th day of the month following the month in which the sales were made. Buildingstars withholds this fee from the total billings collected on behalf of the franchisee.
Buildingstars retains the right to increase the Insurance Program Fee and can discontinue the program at any time by providing prior written notice to the franchisee. The cost of the insurance is subject to change. Buildingstars assumes no liability in connection with the insurance program, even though they make it available to qualified franchisees.
This arrangement is not uncommon in franchising, where franchisors often negotiate group insurance rates for franchisees. However, franchisees should carefully consider the costs and coverage provided by Buildingstars's program compared to obtaining their own insurance. The franchisee bears the risk of potential cost increases or program discontinuation, which could impact their business operations.