Is a Buildingstars franchisee required to name Buildingstars and its designated Affiliates as additional insureds on their insurance policies?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
equired by any applicable federal, state, municipal, and local law, rule, regulation ordinance and code. FRANCHISEE shall make timely filings of all tax returns and shall pay when due all taxes levied or assessed on, and related to this Agreement and the Business. At no time is BUILDINGSTARS required to inform FRANCHISEE of any federal, state, municipal, or local law, rule, regulation, ordinance code, or tax.
- E. Insurance FRANCHISEE must purchase and continuously maintain during the term of this Agreement at a minimum, the insurance coverages that BUILDINGSTARS requires and must furnish to BUILDINGSTARS evidence of such insurance as BUILDINGSTARS shall reasonably request, together with information concerning claims and losses under such insurance. All policies of insurance required to be provided and maintained by FRANCHISEE by this Agreement must name BUILDINGSTARS, and its designated Affiliates and their successors and assigns as additional insureds (without obligation to pay the premium or any deductible amounts, all of which will be paid by FRANCHISEE), and must be carried with such responsible insurance companies and be in such form as is reasonably satisfactory to BUILDINGSTARS. BUILDINGSTARS has the right to require FRANCHISEE to increase the types and amounts of insurance coverage as BUILDINGSTARS may, in its sole discretion, reasonably require. Note that the insurance required by BUILDINGSTARS is the minimum insurance requirements and FRANCHISEE should consult with its own insurance agent to determine if the kinds and amounts of coverage are adequate to protect FRANCHISEE'S interests. BUILDINGSTARS makes no representation, express or implied, that the policies and amounts are sufficient for FRANCHISEE'S needs. BUILDINGSTARS may, in its sole option and from time to time, make insurance coverage available to FRANCHISEE. If FRANCHISEE is eligible and wishes to participate in such insurance coverage, FRANCHISEE will be required to pay an Insurance Program Fee that is described in Section IV.F above.
If FRANCHISEE fails to obtain or maintain adequate insurance, BUILDINGSTARS may, in its sole discretion, obtain insurance for FRANCHISEE in FRANCHISEE'S name and FRANCHISEE shall
reimburse BUILDINGSTARS for the costs of obtaining said insurance.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 18–19)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, franchisees must secure and maintain specific insurance coverage throughout the term of their agreement. A key requirement is that all insurance policies must explicitly name Buildingstars, its designated affiliates, and their successors and assigns as additional insureds. This protects Buildingstars from potential liabilities arising from the franchisee's operations.
The franchisee is responsible for covering all premium and deductible costs associated with this insurance, ensuring that Buildingstars incurs no financial obligations. Buildingstars retains the right to modify the required types and amounts of insurance coverage at its discretion. However, Buildingstars acknowledges that its minimum insurance requirements may not fully cover the franchisee's needs, advising franchisees to consult with their own insurance agents to determine adequate coverage levels.
If a Buildingstars franchisee fails to maintain the required insurance, Buildingstars has the option to obtain insurance on the franchisee's behalf and charge the franchisee for these costs. Additionally, Buildingstars may impose a penalty of $100 for the first day of non-compliance and $25 for each subsequent day until the franchisee secures adequate insurance. Ultimately, it is the franchisee's responsibility to ensure continuous and sufficient insurance coverage, regardless of Buildingstars's minimum requirements, to avoid potential liabilities and breaches of the franchise agreement.