Is a Buildingstars franchisee required to participate in the insurance program developed for Buildingstars and its franchisees?
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 following the month in which the sales were invoiced), an Insurance Program Fee to defray the costs incurred by BUILDINGSTARS. The Insurance Program Fee is subject to change.
At the present time, the Insurance Program Fee is three and one-half percent (3 ½%) of Gross Revenue from the Business, which will provide only the following coverage for the FRANCHISEE:
- (a) Worker's Compensation;
- (b) General Liability Insurance with limits of $1,000,000 per occurrence; $2,000,000 products/completed operations aggregate, and $2,000,000 aggregate; and
- (c) Non-owned auto insurance.
The insurance provided for the Insurance Program Fee is the minimum insurance requirement 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 covered by the Insurance Program Fee are sufficient for FRANCHISEE'S needs. BUILDINGSTARS will withhold the Insurance Program Fee and employee dishonesty coverage (described below) from the amount of billings BUILDINGSTARS collects for the FRANCHISEE, as more fully described in Section VI.D, below. No part of the Insurance Program Fee is refundable. BUILDINGSTARS makes this program available to qualified franchisees and will continue to do so in its sole discretion, but assumes no liability in connection therewith.
The cost of the Insurance Program Fee are subject to change. BUILDINGSTARS reserves the right to change, modify, or discontinue the Insurance Program at any time. FRANCHISEE further reserves the right to terminate FRANCHISEE'S right to remain in the Insurance Program at any time upon prior written notice to FRANCHISEE, for any reason, including, but not limited to FRANCHISEE'S failure to comply with any of the terms of this Agreement.
FRANCHISEE understands that if anyone other than the person(s) signing this Agreement performs services on behalf of FRANCHISEE, FRANCHISEE'S insurance coverage will be jeopardized and such failure will be grounds for termination of this Agreement.
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 for its franchisees. While Buildingstars pays the insurance premiums, the franchisee is obligated to pay Buildingstars an Insurance Program Fee monthly, which defrays the costs incurred by Buildingstars. Currently, this 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, $2,000,000 aggregate, and non-owned auto insurance. However, Buildingstars states that this is the minimum insurance requirement, and franchisees should consult their own insurance agent to determine if the coverage is adequate for their needs. Buildingstars makes no guarantee that the insurance coverage provided is sufficient for the franchisee's needs.
Buildingstars retains the right to modify or discontinue the Insurance Program at any time. The franchisee also reserves the right to terminate their participation in the Insurance Program by providing written notice to Buildingstars. However, franchisees must purchase and maintain the minimum insurance coverages that Buildingstars requires. If a franchisee fails to maintain adequate insurance, Buildingstars has the option to obtain insurance on behalf of the franchisee, and the franchisee will be responsible for reimbursing Buildingstars for the costs. Additionally, Buildingstars may charge the franchisee $100 for the first day and $25 for each additional day the franchisee does not have the minimum required insurance.