What conditions must be met for Buildingstars to approve a transfer of the franchise?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY |
|---|---|---|
| 1 year for Technician's Franchise Agreement; 3 years for On-Site Manager | ||
| a. Term of the franchise | Section V | Franchise Agreement and 5 years for Corporate Franchise Agreement. |
| b. Renewal or extension | Section V | 3 renewals for 1 year each for Technician Franchise Agreement, however, if a new franchise agreement is not signed, the original franchise agreement continues on a month-to-month basis; 3 renewals for 3 years each for On-Site Manager Franchise Agreement and 3 renewals of 5 years each for Corporate Franchise Agreement - all subject to terms of Section V of the Franchise Agreement. |
| c. Requirement for franchisee to renew or extend | Section V | Give notice, sign the then current franchise agreement, and pay a renewal fee. The then current franchise agreement may contain terms and conditions materially different from those in your previous franchise agreement, such as different fee requirements. Corporate Program franchises must also have been in full compliance with the Minimum Revenue Requirements. |
| d. Termination by franchisee | Section XI.B | If we breach agreement and do not cure or attempt to cure after notice |
| e. Termination by franchisor without cause | Not Applicable | Not Applicable |
| f. Termination by franchisor with cause | Sections XI.A | If you don't satisfactorily complete training or generally if you breach agreement |
| g. "Cause" defined- curable defaults | Section XI.A | You have 10 days to cure monetary defaults and failure to comply with the Conditions of Grant under the Technician Franchise Agreement and 30 days to cure all others except those listed in Sect. XI.A.3 of the Franchise Agreement. |
| h. "Cause" defined – non-curable defaults | Section XI.A.3 | Non-curable defaults: conviction of a felony, repeated defaults even if cured, failing to comply with the Minimum Revenue Requirement, bankruptcy, fraud, issuance of 2 or more insufficient funds checks and abandonment |
| I. Franchisee's obligation on termination or non-renewal | Section XIII | Complete de-identification and payment of amounts due, return materials, Manual, direct transfer of phone |
| j. Assignment of contract by franchisor | Section XIII.A | No restrictions on right to assign |
| k. "Transfer" by franchisee-definition | Section XIII.B | Consent of us |
| l. Franchisor approval of transfer by franchisee | Section XIII.B | Right to approve all transfers |
| m. Conditions for franchisor approval of transfer | Section XIII.B | Transferee qualifies, transfer fee paid, new franchise agreement signed, training of transferee, release signed |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 29–31)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, the franchisor has the right to approve all transfers of a franchise. Buildingstars will only approve a transfer if the following conditions are met: the transferee must qualify to become a franchisee, the transfer fee must be paid, a new franchise agreement must be signed, the transferee must complete training, and a release must be signed.
These conditions are typical in the franchise industry, as franchisors want to ensure that any new franchisee meets their standards and is properly trained to maintain the brand's reputation. The transfer fee is also a common requirement to cover the franchisor's administrative costs associated with the transfer process.
Prospective Buildingstars franchisees should carefully consider these conditions before deciding to purchase a franchise. It is important to understand the requirements for transferring the franchise, as this could impact the franchisee's ability to sell the business in the future. Franchisees should also inquire about the amount of the transfer fee and the specific training requirements for the transferee.