For Buildingstars, what is the definition of 'Principal Owners' if the franchisee is a limited liability company?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
- I. "Principal Owner(s)" means the FRANCHISEE if FRANCHISEE is an individual or more than one individual, the shareholder(s) of FRANCHISEE if FRANCHISEE is a corporation, the partner(s) owning the partnership if FRANCHISEE is a partnership, or the member(s) and/or manager if the FRANCHISEE is a limited liability company.
Source: Item 15 — OBLIGATION OF THE FRANCHISEE TO PARTICIPATE IN THE ACTUAL OPERATION OF YOUR BUSINESS (FDD pages 28–29)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, if the franchisee is a limited liability company, the 'Principal Owners' are defined as the members and/or managers of the limited liability company. This definition is important because Buildingstars requires Principal Owners to participate directly in the operation and management of the franchised business.
This requirement means that if you choose to structure your Buildingstars franchise as a limited liability company, the individuals who are members or managers of the LLC must be actively involved in the day-to-day operations. They can't simply be passive investors. This ensures that someone with a vested interest and knowledge of the Buildingstars system is always overseeing the business.
Furthermore, Principal Owners must complete Buildingstars's Initial Training Program and maintain the confidentiality of Buildingstars's confidential information and trade secrets. They are also required to sign a standard form Guarantee, ensuring they are personally liable for the obligations of the franchisee under the Franchise Agreement. This underscores the importance Buildingstars places on having committed and responsible individuals at the helm of each franchise location.