Does a Buildingstars franchisee have rights of first refusal to acquire additional franchises?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
city of the FRANCHISEE, shall not give rise to the BUILDINGSTARS' right of first refusal as set forth in paragraph XIII.D below, provided that
the heirs, personal representatives or conservators, as applicable, meet BUILDINGSTARS' standards for new franchisees; execute the then-current form of Franchise Agreement; and, that a manager has, or within thirty days, shall have satisfactorily completed BUILDINGSTARS' Initial Training Program.
D. Right of First Refusal. Notwithstanding the foregoing, if FRANCHISEE receives a bona fide, executed, written offer to acquire an Interest from a responsible, fully disclosed purchaser, FRANCHISEE must submit a copy of the offer to BUILDINGSTARS. FRANCHISEE must also provide BUILDINGSTARS with any other information it requests to evaluate the offer. BUILDINGSTARS has the right, exercisable by delivering written notice to the FRANCHISEE within thirty (30) days from the date of last delivery to BUILDINGSTARS of the offer and any other documents requested by BUILDINGSTARS, to acquire the Interest for the price and on the terms and conditions contained in the offer. Regardless of the terms of the offer, however, BUILDINGSTARS may, in its discretion: substitute cash for any form of payment proposed in the offer; require the FRANCHISEE to include customary warranties and representations in the purchase agreement; and structure the transaction as an "asset purchase," rather than a "stock purchase." BUILDINGSTARS will not be obligated to pay any "finder's" or broker's fees that are a part of the proposed sale and shall not be obligated to comply with any part of the offer which directly or indirectly requires payment of any consideration other than a bona fide purchase price for the interest proposed to be transferred.
If BUILDINGSTARS declines to exercise its rights of first refusal, FRANCHISEE will have ninety (90) days after BUILDINGSTARS declines or the right expires, whichever first occurs, to sell the interest to said bona fide purchaser upon terms no more favorable than those offered to BUILDINGSTARS, subject to compliance with paragraph XIII.B. After said ninety (90) days, or if the prospective purchaser does not acquire the franchise, FRANCHISEE must again comply with this paragraph and give BUILDINGSTARS the first right to acquire the Interest prior to sale. The election by BUILDINGSTARS not to exercise its right of first refusal as to any offer shall not affect its right of first refusal as to any subsequent offer.
XIV. INDEPENDENT CONTRACTOR/INDEMNIFICATION
BUILDINGSTARS and FRANCHISEE are independent contractors, and no partnership, fiduciary, joint venture, or employment relationship exists between them, in any respect. FRANCHISEE shall conspicuously identify itself at the premises of the Business and in all dealings with the public as the owner of the business. BUILDINGSTARS shall not be involved in the day-to-day management or control of the Business.
Source: Item 12 — TERRITORY (FDD pages 26–27)
What This Means (2025 FDD)
The 2025 Buildingstars Franchise Disclosure Document (FDD) does not explicitly state that a franchisee has the right of first refusal to acquire additional Buildingstars franchises. However, the FDD does detail Buildingstars' right of first refusal if a franchisee receives an offer to sell their existing franchise.
Specifically, if a Buildingstars franchisee receives a legitimate offer to purchase their franchise, they must present this offer to Buildingstars. Buildingstars then has 30 days from the date they receive the offer and any supporting documentation to decide whether to acquire the franchise on the same terms. Buildingstars has the discretion to substitute cash for any proposed payment method, require customary warranties in the purchase agreement, and structure the transaction as an asset purchase rather than a stock purchase. Buildingstars is not obligated to pay finder's fees or any consideration beyond the bona fide purchase price.
If Buildingstars declines the offer, the franchisee has 90 days to sell the franchise to the original purchaser under the same terms. After 90 days, or if the original purchaser does not complete the acquisition, the franchisee must again offer Buildingstars the right of first refusal before selling to another party. Buildingstars' decision to decline a right of first refusal for one offer does not prevent them from exercising that right on subsequent offers.
This right of first refusal does not apply to the transfer of the franchise to the franchisee's heirs, personal representatives, or conservators in the event of death or legal incapacity, provided that these individuals meet Buildingstars' standards for new franchisees, execute the current franchise agreement, and ensure a manager completes the initial training program within 30 days.