What fees and costs is Buildingstars authorized to deduct from payments collected from Buildingstars customers?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
elinquent Customers on a monthly basis. Once a month BUILDINGSTARS will provide FRANCHISEE a Monthly Revenue Statement. FRANCHISEE hereby authorizes BUILDINGSTARS to collect cash and other forms of payment from accounts to which FRANCHISEE has rendered services or products, endorse FRANCHISEE'S name on and deposit checks, sign its name on liens, and take any other action necessary to carry out the terms of this Agreement.
FRANCHISEE further authorizes BUILDINGSTARS to deduct from payments BUILDINGSTARS collects from the Customers the fees described in Sections III and IV of this Agreement and any other amounts due to BUILDINGSTARS, any authorized insurance payments, and any out-of-pocket costs (including but not limited to attorney's fees and court costs) incurred by BUILDINGSTARS in enforcing payment of accounts by Customers, FRANCHISEE or FRANCHISEE'S guarantors. BUILDINGSTARS will collect all payments actually received and disburse the amount due to FRANCHISEE in accordance with the procedures set forth in the Confidential Operations Manual.
b. Collections. FRANCHISEE must pay for all reasonable attorneys' fees, court costs, expenses, and out-of-pocket costs incurred to enforce collection from Customers. If a Customer is delinquent in payment, FRANCHISEE is responsible for any and all collection activities. BUILDINGSTARS is not obligated to hire attorneys, commence litigation, or do any acts (other than to send scheduled statements) in order to enforce payment of accounts by Customers. The only collection activities BUILDINGSTARS is required to provide are ongoing phone contact and reminder notices both
mailed and faxed to delinquent Customers on a monthly basis for such time as BUILDINGSTARS deems appropriate.
- c. Application of Payments. FRANCHISEE agrees to immediately deliver to BUILDINGSTARS any and all money collected from its Customers.
- d. Taxes. FRANCHISEE is and will continue to be responsible for complying with all local, state and federal tax requirements including but not limited to income tax, sales tax, use tax or any other tax required along with the proper reporting requirements.
- E. Offering Period for Initial Customer Accounts. BUILDINGSTARS shall offer FRANCHISEE initial customer accounts totaling at least Two Thousand Dollars ($2,000).
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, Buildingstars is authorized to deduct several fees and costs from the payments they collect from customers on behalf of the franchisee. These deductions include fees described in Sections III and IV of the Franchise Agreement, any other amounts due to Buildingstars, authorized insurance payments if the franchisee participates in the insurance program, and any out-of-pocket costs, such as attorney's fees and court costs, incurred by Buildingstars in enforcing payments from customers, the franchisee, or the franchisee's guarantors.
Specifically, Buildingstars withholds the Administration Fee, which is 5% of the Gross Sales from the Business, and the Insurance Program Fee, which is currently 3.5% of Gross Sales, from the billings collected for the franchisee. Buildingstars also withholds Non-Performance Fees from the amount of billings collected for the franchisee, which are charged at a rate of $25 per hour per person needed to resolve a customer complaint, plus any other actual out-of-pocket expenses incurred if the franchisee does not remedy the complaint within a 24-hour period.
This arrangement means that the franchisee will not receive the full amount billed to customers, as Buildingstars will deduct these fees and costs before disbursing the remaining amount to the franchisee. It is important for a prospective franchisee to fully understand these deductions and factor them into their financial projections. The franchisee is responsible for paying all local, state, and federal tax requirements including but not limited to income tax, sales tax, use tax or any other tax required along with the proper reporting requirements.