When is the Failure to Carry Insurance fee payable for a Buildingstars franchise?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
| NAME OF FEE | AMOUNT | DUE DATE | REMARKS |
|---|---|---|---|
| Failure to Carry Insurance | $100 for the first day and $25 for each additional day | On demand | Payable only if you do not carry the required insurance |
Source: Item 6 — OTHER FEES\ (FDD pages 14–16)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, the Failure to Carry Insurance fee is payable on demand. This fee is imposed if a franchisee fails to maintain the required insurance coverage. The fee is $100 for the first day of non-compliance and $25 for each additional day the franchisee remains uninsured.
This means that if a Buildingstars franchisee does not have the required insurance, they will immediately be charged $100, and then an additional $25 for every day they remain out of compliance. This can quickly add up, creating a significant financial burden. It is crucial for prospective franchisees to understand the insurance requirements and ensure they are always in compliance to avoid these fees.
Franchisors often require franchisees to maintain specific insurance coverage to protect both the franchisee and the franchisor from potential liabilities. The 'on demand' payment term means Buildingstars can require immediate payment of the fee, which could impact a franchisee's cash flow. Therefore, maintaining continuous and adequate insurance coverage is not just a matter of legal compliance but also a critical aspect of financial management for a Buildingstars franchisee.