Is a Buildingstars franchisee required to participate in the insurance program developed for Buildingstars?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
unt of billings BUILDINGSTARS collects for the FRANCHISEE.
- D. Administration Fee. FRANCHISEE shall pay to BUILDINGSTARS monthly (by the fifteenth (15th) day of the month following the month in which the sales were invoiced), an Administration Fee equal to five percent (5%) of the Gross Revenue from the Business throughout the term of this Agreement. BUILDINGSTARS will withhold the Administration Fee from the amount of billings BUILDINGSTARS collects for the FRANCHISEE, as more fully described in Section VI.D below. No part of the Administration Fee is refundable.
- E. Insurance Program Fee. FRANCHISEE is required to participate in the insurance program developed for BUILDINGSTARS and its franchisees. Although BUILDINGSTARS is obligated to pay the insurance premiums for FRANCHISEE'S coverage, FRANCHISEE is obligated to pay to BUILDINGSTARS monthly (by the fifteenth (15th) day of the month followin
Source: Item 23 — RECEIPT (FDD pages 43–217)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, franchisees are required to participate in the insurance program that Buildingstars has developed. Franchisees are obligated to pay Buildingstars an Insurance Program Fee monthly to offset the costs incurred by Buildingstars, even though Buildingstars is obligated to pay the insurance premiums for the franchisee's coverage. Currently, the Insurance Program Fee is 3.5% of Gross Revenue from the Business.
The insurance coverage provided by the Insurance Program Fee includes worker's compensation, general liability insurance with limits of $1,000,000 per occurrence, $2,000,000 products/completed operations aggregate, and $2,000,000 aggregate, and non-owned auto insurance. Buildingstars makes the insurance program available to qualified franchisees and can discontinue the program at its sole discretion. The cost of the Insurance Program Fee is subject to change.
Buildingstars requires franchisees to purchase and maintain minimum insurance coverages during the term of the agreement and to provide evidence of such insurance. All insurance policies must name Buildingstars as an additional insured. If a franchisee fails to maintain adequate insurance, Buildingstars has the option to obtain insurance for the franchisee and charge the franchisee for the costs, along with an additional fee of $100 for the first day and $25 for each additional day the minimum insurance is not maintained. Franchisees should consult with their own insurance agent to determine if the minimum insurance requirements are adequate for their needs.