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What are the Buildingstars franchisee's obligations regarding compliance with standards (Item 9) and how does this relate to potential litigation (Item 3)?

Buildingstars Franchise · 2025 FDD

Answer from 2025 FDD Document

term of this agreement, to operate, advertise and promote the Business under the name "Buildingstars" without prefix or suffix and to adopt and use the Marks and System licensed hereunder solely in the

manner prescribed by BUILDINGSTARS. FRANCHISEE must file an assumed or fictitious name filing where required by applicable law and always use the words d/b/a after FRANCHISEE'S legal name.

C. Standards of Operation.

    1. FRANCHISEE agrees to comply with BUILDINGSTARS' written policies, practices, procedures, regulations and standards, whether set forth in the Confidential Operations Manual or in other materials supplied to FRANCHISEE by BUILDINGSTARS which may be changed or modified from time to time.
    1. FRANCHISEE shall use all equipment, products and supplies in the operation of the Business that meet BUILDINGSTARS' standards and specifications as set forth in the Confidential Operations Manual.
    1. FRANCHISEE shall continuously and prominently display the Marks in connection with the Business, and will not take or fail to take any action, the result of which might detract from the public image of BUILDINGSTARS, the Business, the System or the Marks. FRANCHISEE shall not display or permit to be displayed at the Business any business name or service not authorized hereunder.
    1. FRANCHISEE shall at all times maintain minimum levels of inventory and supplies in the amount and type as may be directed by BUILDINGSTARS from time to time or as may be specified in the Confidential Operations Manual.
    1. All of FRANCHISEE'S business dealings will be governed by the highest professional standards of honesty, integrity, fair dealing and ethical conduct. FRANCHISEE will do nothing that would tend to discredit, dishonor, reflect adversely upon, or in any manner injure the reputation of BUILDINGSTARS, its other franchisees and its Affiliates. FRANCHISEE shall pay when due all of its own obligations including but not limited to taxes whatsoever incurred with the purchase and operation of the Business.
    1. FRANCHISEE shall at all times faithfully, honestly and diligently perform the obligations hereunder, use its best efforts to promote and enhance the Business, and shall not engage in any business or other activity that will conflict with the FRANCHISEE'S obligations hereunder. FRANCHISEE or its Principal Owners agree to participate personally in the direct operation of the Business on a full time basis.
    1. FRANCHISEE agrees to and shall take all steps as are necessary to ensure that its employees treat all Customers fairly and provide services hereunder in an honest, ethical, and nondiscriminatory manner. Further, FRANCHISEE shall not withhold any material information from its Customers or attempt to sell any service to them that FRANCHISEE believes, in its good faith estimation, is not needed.
    1. FRANCHISEE shall not advertise in a deceptive, misleading, or unethical manner; shall only make those promises, representations, and guarantees to Customers, and others at the Business authorized by BUILDINGSTARS; preserve good Customer relations; render competent, prompt, courteous, and knowledgeable service; and meet such minimum standards as BUILDINGSTARS may establish from time to time in the Confidential Operations Manual.
    1. FRANCHISEE recognizes that it is not permitted to use the System or Marks in connection with the sale of any products or services other than the cleaning business. If a Customer requests that FRANCHISEE render any services or sell any products that are not of the type that is

normally rendered in connection with the System, FRANCHISEE must first notify BUILDINGSTARS and obtain approval from BUILDINGSTARS. BUILDINGSTARS will not unreasonably object to FRANCHISEE'S request provided that the services do not interfere with the services that FRANCHISEE renders in connection with the franchise, the services and products are in no way associated with the Marks and System, FRANCHISEE is capable of providing the products and services in a good and workmanlike manner, and the Customer is fully apprised that the services or products are not being rendered in connection with the franchise. BUILDINGSTARS retains the right to object to any future requests and the failure to object to any request shall not prohibit BUILDINGSTARS from objecting to any future requests.

    1. In the event that FRANCHISEE wishes to advertise its Business, FRANCHISEE must submit all of its own advertising and sale promotion materials (including Internet advertising) to BUILDINGSTARS for prior consent. If BUILDINGSTARS does not consent to the advertising within 20 days after receipt of the advertising, said advertising is deemed acceptable. FRANCHISEE shall not advertise or use in advertising or other form of promotion, the Marks without the appropriate copyright, trademark, and service mark registration symbols for those marks which are registered and without BUILDINGSTARS' consent.
  • D. 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.
  • E.

What This Means (2025 FDD)

According to Buildingstars's 2025 Franchise Disclosure Document, franchisees have several obligations to comply with operational standards. Buildingstars franchisees must adhere to the policies, practices, procedures, regulations, and standards outlined in the Confidential Operations Manual or other materials provided by Buildingstars, which may be modified over time. They are required to use equipment, products, and supplies that meet Buildingstars' standards and specifications as detailed in the manual. Franchisees must also prominently display Buildingstars' marks and avoid any actions that could harm the brand's public image. Maintaining minimum inventory levels as directed by Buildingstars is also a requirement. These standards are designed to ensure consistency and quality across all Buildingstars franchises.

In addition to operational standards, Buildingstars franchisees must conduct all business dealings with honesty, integrity, and ethical conduct. They must avoid any actions that could discredit or harm the reputation of Buildingstars, its other franchisees, or its affiliates. Franchisees are responsible for paying their obligations when due, including all applicable taxes. They must also diligently perform their obligations under the franchise agreement, use their best efforts to promote the business, and avoid any conflicting business activities. Franchisees are expected to treat customers fairly, provide services honestly and ethically, and avoid withholding material information or selling unnecessary services.

Buildingstars franchisees are also obligated to comply with advertising standards. They must not engage in deceptive or unethical advertising and must only make promises or representations authorized by Buildingstars. Maintaining good customer relations and providing competent service are essential. Franchisees must also comply with all federal, state, and local laws, rules, and regulations, including the Americans with Disabilities Act (ADA) and OSHA standards. They are responsible for obtaining all necessary licenses and permits. Buildingstars is not obligated to inform franchisees of any laws or regulations.

Failure to comply with these standards could lead to legal issues, as outlined in Item 3 of the FDD, which discusses potential litigation. While the provided excerpts do not detail the specific litigation risks, it is reasonable to assume that non-compliance with operational, ethical, or legal standards could result in disputes, legal action, or termination of the franchise agreement. Prospective franchisees should carefully review Item 3 of the FDD and consult with an attorney to understand the potential legal ramifications of failing to meet Buildingstars' standards and obligations.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.