Does Buildingstars have discretion in applying payments from the franchisee to past due indebtedness?

According to Buildingstars's 2025 Franchise Disclosure Document, Buildingstars has the sole discretion to apply any payments from the franchisee to any past due indebtedness. This includes fees, expenses, purchases from Buildingstars or its affiliates, interest, or any other indebtedness. This means that Buildingstars is not obligated to apply payments in a way that the franchisee might prefer, such as to current charges rather than older debts.

This provision protects Buildingstars by allowing them to prioritize the collection of older debts, which might be at greater risk of non-payment. However, it could create challenges for a franchisee who is trying to manage their cash flow and pay current obligations. If a franchisee has outstanding debt, Buildingstars can direct new payments to that debt, potentially leading to late fees or other penalties on more recent charges if the franchisee does not have sufficient funds to cover everything.

It is also stated that neither Buildingstars nor its affiliates are required to accept payments after they are due or extend credit to finance the franchisee's operations. This reinforces Buildingstars's control over payment application and its lack of obligation to provide financial flexibility to franchisees. Prospective franchisees should be aware of this policy and carefully manage their accounts to avoid past due balances and potential redirection of payments.