Does the Buildingstars FDD require the franchisee to defend Buildingstars against claims?

According to Buildingstars's 2025 Franchise Disclosure Document, franchisees are required to indemnify and hold Buildingstars harmless from claims arising from the franchisee's failure to comply with the insurance program requirements. This means that if a franchisee does not meet the insurance requirements set by Buildingstars, they are responsible for defending Buildingstars against any claims, demands, actions, or causes of action, including covering Buildingstars' attorney's fees.

This obligation is a material inducement for Buildingstars to enter into the franchise agreement. The FDD emphasizes that if anyone other than the person signing the agreement performs services on behalf of the franchisee, the franchisee's insurance coverage will be jeopardized, potentially leading to personal liability for any claims made by such persons. Buildingstars assumes no responsibility for the franchisee's violation of the terms of the insurance program.

This requirement is not uncommon in franchising, as franchisors often seek to protect their brand and reputation from liabilities caused by franchisee negligence or non-compliance. However, prospective Buildingstars franchisees should carefully review the insurance requirements and ensure they fully understand their obligations to avoid potential legal and financial repercussions. It is advisable to consult with an insurance agent to determine adequate coverage and to ensure compliance with Buildingstars' insurance program.