What are the Buildingstars franchisee's obligations regarding compliance with laws (Item 9) and how does this relate to potential litigation (Item 3)?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
Licensure; Compliance with Laws. At all times FRANCHISEE shall comply with all federal, state, municipal, and local laws, rules, regulations, ordinances, and codes applicable and related to this Agreement, the Business, and all aspects of the conduct of the Business including but not limited to the Americans with Disabilities Act ("ADA") and OSHA in all respects, and nothing contained herein or in the Confidential Operations Manual shall be construed as or implied as imposing any obligation on BUILDINGSTARS or its Affiliates in relation to the ADA or OSHA.
FRANCHISEE shall obtain all licenses and permits required 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.
To the fullest extent permitted by law, FRANCHISEE, for itself and its owners, employees, agents, officers, directors, members, managers, parents, subsidiaries, affiliates, successors and assigns ("Indemnitors"), agree, at their sole cost and expense, to indemnify, defend and hold harmless, and to reimburse on demand BUILDINGSTARS and all entities related to BUILDINGSTARS and their respective shareholders, directors, officers, members, managers, employees agents, partners, attorneys, licensees, affiliates successors and assigns ("Indemnified Parties") for and against any and all damages, losses, liabilities, bodily injury, property damage, obligations, penalties, fines, claims, litigation, demands, defenses, judgments, suit proceedings, administrative orders, consent agreements, costs, disbursements or expenses of any kind or any nature whatsoever, including without limitation, reasonable attorneys' and expert fees and disbursements arising out of or related to or in any way arising out of the acts or omissions of any Indemnitor, including without limitation (i) any act or omission, negligent or otherwise, of the Indemnitors or anyone directly or indirectly employed by them or anyone for whom they may be
liable relative to the Business; (ii) any breach by the Indemnitors of any term or provision of this Agreement; and (iii) the cost, including, but not limited to reasonable attorney's fees, of enforcing this indemnification provision. The obligations of Indemnitors are joint and several.
This indemnification shall not be construed to indemnify an Indemnified Party to the extent such indemnification is prohibited by law, including, an indemnification of any Indemnified Party from its own negligence, if prohibited by law. To the extent indemnification of any party hereunder would be prohibited by law, this provision shall not apply to such party with respect to such otherwise indemnifiable act but shall continue to be effective as to all other parties with respect to whom indemnification is not prohibited by applicable law.
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, franchisees must adhere to all applicable federal, state, municipal, and local laws, rules, regulations, ordinances, and codes related to the Franchise Agreement, the business, and all aspects of its operation. This includes, but is not limited to, compliance with the Americans with Disabilities Act (ADA) and OSHA standards. Franchisees are also responsible for obtaining all necessary licenses and permits and for the timely filing and payment of all applicable taxes. Buildingstars is not obligated to inform franchisees of any laws, rules, regulations or taxes.
Buildingstars's FDD also stipulates that franchisees are responsible for indemnifying Buildingstars against any damages, losses, liabilities, or expenses arising from the franchisee's acts or omissions. This includes any claims, litigation, or judgments resulting from negligence or failure to comply with the terms of the Franchise Agreement. The franchisee is responsible for covering legal costs, including attorney's fees, associated with defending Buildingstars against such claims. This indemnification extends to Buildingstars and its related entities, shareholders, directors, officers, members, managers, employees, agents, partners, attorneys, licensees, affiliates, successors, and assigns.
In practical terms, a Buildingstars franchisee's failure to comply with relevant laws and regulations can lead to potential legal action, for which the franchisee would be responsible for defending and covering any resulting costs or damages incurred by Buildingstars. This underscores the importance of franchisees maintaining thorough knowledge of and adherence to all applicable laws and regulations to mitigate the risk of litigation and financial liability. However, the indemnification does not extend to protecting Buildingstars from its own negligence if such indemnification is prohibited by law.