What does the Buildingstars franchisee agree to pay in addition to the unpaid balance and interest in the event of default?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
fer, or the termination or expiration of the term of this Agreement. Except as provided in subsection A. above, the arbitration will be conducted on an individual, not a class-wide basis. None of the parties to the arbitration will be entitled to consolidation of the arbitration proceedings with the proceedings of any third party, nor will the arbitrator or any court be empowered to order a consolidation of proceedings with any third party.
D. Dispute Resolution Fee. In the event that the FRANCHISEE or its guarantors have not complied with the provisions in this Section on Dispute Resolutions, FRANCHISEE shall reimburse BUILDINGSTARS for all of its expenses incurred in curing the FRANCHISEE's breach (including, without limitation, BUILDINGSTARS's attorneys' fees and costs related to dismissing and responding to any improperly filed claim) and pay the BUILDINGSTARS a Dispute Resolution Fee of $50,000 ("Dispute Resolution Fee"). FRANCHISEE acknowledges and agrees that the BUILDINGSTARS will be damaged by such breach. FRANCHISEE agrees that a precise calculation of the full extent of the damages that BUILDINGSTARS will
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, a franchisee may incur additional costs beyond the unpaid balance and interest in the event of default. Specifically, if a Buildingstars franchisee fails to comply with the dispute resolution provisions outlined in the franchise agreement, they must reimburse Buildingstars for all expenses incurred in rectifying the breach. This includes Buildingstars' attorneys' fees and costs associated with dismissing or responding to any improperly filed claim.
In addition to covering Buildingstars' expenses, the franchisee must also pay Buildingstars a Dispute Resolution Fee of $50,000. Buildingstars stipulates that this fee is considered liquidated damages to compensate for the damages incurred due to the breach of the dispute resolution provisions. Buildingstars retains the right to collect these amounts alongside any other rights they may exercise for non-compliance under the agreement.
This clause highlights the importance of adhering to the dispute resolution processes outlined in the Buildingstars franchise agreement. The potential for incurring substantial legal fees and a fixed $50,000 Dispute Resolution Fee underscores the financial risks associated with non-compliance. Prospective franchisees should carefully review and understand these provisions to avoid such penalties.