Must a Buildingstars franchisee satisfy all monetary obligations to Buildingstars before a transfer?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
Payments.
The transferor has satisfied all of its monetary obligations to BUILDINGSTARS, BUILDINGSTARS' Affiliates and suppliers under this Agreement and all other agreements it has with BUILDINGSTARS;
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, a franchisee looking to transfer their franchise must first satisfy all outstanding financial obligations to Buildingstars, its affiliates, and its suppliers. This requirement extends to all agreements the franchisee has with Buildingstars.
This condition ensures that Buildingstars receives all payments owed before a transfer is approved. It protects Buildingstars' financial interests and ensures that the new franchisee is not burdened with the previous owner's debts. This is a fairly standard practice in franchising, as franchisors want to maintain a clean financial slate with each new owner.
In practical terms, a Buildingstars franchisee considering a transfer should ensure all accounts with Buildingstars and its affiliates are current. This includes franchise fees, royalty payments, and any other outstanding debts. Failure to meet these obligations could delay or prevent the transfer of the franchise. Franchisees should also factor in these potential payments when negotiating the sale price of their franchise, as these payments will reduce the net proceeds from the sale.