Can Buildingstars disclaim representations made in the franchise disclosure document through the franchise agreement?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
- K.
No Warranty.
FRANCHISEE acknowledges that, except as otherwise specifically stated herein, BUILDINGSTARS has the absolute right to exercise its own judgment on various matters about this Agreement and the Manual, and has the absolute right to approve, disapprove, give its consent and refuse to consent to FRANCHISEE'S requests in its sole and absolute discretion.
FRANCHISEE agrees that BUILDINGSTARS' action, refusal to act, approval, disapproval, consent, or refusal of consent is not, and shall not be deemed, a representation, warranty, certification or guarantee by BUILDINGSTARS about that which is acted upon or refused consent, or about any appropriateness, legality, profitability, or success related thereto.
No BUILDINGSTARS action, refusal to act, approval, disapproval, consent or refusal to consent is, or shall be deemed, a guarantee, warranty, or representation that the Business complies with, or meets any local, municipal, state, federal, or other laws or regulations relating to the offer of services or otherwise.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, the franchise agreement contains a "No Warranty" clause. This clause stipulates that Buildingstars has the right to exercise its judgment on matters related to the agreement and the manual, including approvals, disapprovals, consents, and refusals of consent.
The agreement specifies that any action, inaction, approval, disapproval, consent, or refusal of consent by Buildingstars should not be considered a representation, warranty, certification, or guarantee regarding the appropriateness, legality, profitability, or success of the franchisee's business. Furthermore, no action or decision by Buildingstars constitutes a guarantee, warranty, or representation that the business complies with any laws or regulations.
This means that, except as explicitly stated in the franchise agreement, Buildingstars does not provide any warranties or guarantees regarding the franchisee's business. Franchisees are essentially agreeing that Buildingstars' decisions and actions are not promises of any specific outcome or compliance with regulations. This places the onus on the franchisee to ensure their business's legality, profitability, and success, as Buildingstars disclaims responsibility for these aspects beyond what is explicitly stated in the agreement.
This type of clause is common in franchise agreements, as it protects the franchisor from liability for the franchisee's business performance and compliance with laws. However, prospective Buildingstars franchisees should carefully consider the implications of this clause and seek legal advice to fully understand their rights and responsibilities.