Does Buildingstars have the discretion to apply payments from the franchisee to past due debts?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
- P.
Payments from FRANCHISEE.
BUILDINGSTARS has the sole discretion to apply any payments by FRANCHISEE to any past due indebtedness of FRANCHISEE for any fees, expenses, purchases from BUILDINGSTARS or its Affiliates, interest or any other indebtedness.
Neither BUILDINGSTARS nor any of its Affiliates are required to accept payments after same are due or extend credit or otherwise finance FRANCHISEE'S operation of the franchise.
Source: Item 23 — RECEIPT (FDD pages 43–217)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, Buildingstars has the authority to allocate a franchisee's payments towards any outstanding debts. Specifically, Buildingstars has the sole discretion to apply payments from the franchisee to any past due indebtedness. This includes fees, expenses, purchases from Buildingstars or its affiliates, interest, or any other form of debt the franchisee owes.
This provision grants Buildingstars significant control over the franchisee's payments, allowing them to prioritize the collection of overdue amounts. For a prospective franchisee, this means that any payment made to Buildingstars could be used to offset existing debts before being applied to current obligations.
Buildingstars is not obligated to accept payments after they are due, extend credit, or finance the franchisee's operations. Franchisees should be aware of this policy and ensure timely payments to avoid having their payments applied to past debts, potentially leading to further financial strain or disruption of their franchise operations.