Can Buildingstars deduct amounts due to Buildingstars from payments collected from customers?

According to Buildingstars's 2025 Franchise Disclosure Document, Buildingstars is authorized to deduct certain fees and amounts from the payments they collect from customers on behalf of the franchisee. This includes fees outlined in Sections III and IV of the Franchise Agreement, any other amounts owed to Buildingstars, authorized insurance payments, and any out-of-pocket costs Buildingstars incurs while enforcing payment of accounts from customers, franchisees, or their guarantors. Buildingstars will then disburse the remaining amount to the franchisee, following the procedures detailed in the Confidential Operations Manual.

Specifically, Buildingstars withholds several fees from billings it collects for the franchisee. These include the Administration Fee, which is equal to 5% of the Gross Sales, and the Insurance Program Fee, which is currently 3.5% of Gross Sales, if the franchisee participates in the insurance program. Buildingstars also withholds Non-Performance Fees from the amount of billings it collects for the franchisee if Buildingstars has to remedy a customer complaint that the franchisee did not adequately resolve within a 24-hour period. The Non-Performance Fee is $25 per hour per person needed to resolve the complaint, plus any other actual out-of-pocket expenses incurred.

This arrangement means that a Buildingstars franchisee will not receive the full amount billed to customers directly. Instead, Buildingstars retains a portion to cover various fees and costs. It is important for prospective franchisees to carefully review Sections III and IV of the Franchise Agreement, as well as the Confidential Operations Manual, to fully understand all potential deductions. Franchisees should also be aware that Buildingstars has the right to audit the franchisee's records and can charge interest and audit costs if underreporting of Gross Sales is discovered.