What are the Buildingstars franchisee's obligations regarding employee training (Item 9) and how does this relate to potential bankruptcy (Item 4)?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
BUILDINGSTARS will provide an initial training program for the operation of the Business using the System and Marks for one of the Principal Owners and one other
person. The initial training program is furnished after this Agreement is executed and prior to the opening of the Business and will be furnished at such time and place as BUILDINGSTARS may designate. FRANCHISEE shall pay all transportation, lodging, meals and other expenses incurred by it and its employees in attending this program. If FRANCHISEE'S Principal Owners do not satisfactorily complete the training program, BUILDINGSTARS shall have the right to terminate this Agreement. Satisfactory completion of the training program is, however, no assurance of the success of the Business.
FRANCHISEE is responsible for hiring and maintaining a staff of qualified and competent employees for its Business. FRANCHISEE is solely responsible for all its hiring decisions and for all obligations arising from FRANCHISEE's relationship with its employees, even if FRANCHISEE uses sample employment policies, procedures or examples that BUILDINGSTARS makes available for FRANCHISEE's optional use. The use of any sample document by FRANCHISEE is not required by this Agreement. All documents are provided "as is" and BUILDINGSTARS makes no warranty that the information and sample documents comply with applicable federal, state or local laws, regulations or ordinances where FRANCHISEE does business. The fact that BUILDINGSTARS has shared this information and these sample forms/information with FRANCHISEE is not intended to be, nor is it, a requirement by BUILDINGSTARS that FRANCHISEE must use this or a similar document or process in FRANCHISEE'S business. Further, providing sample documents is not intended to indicate in any way that BUILDINGSTARS has the right to require that any franchisee use this or a similar document or process in their franchised business, as BUILDINGSTARS does not have such rights to require use of these documents. BUILDINGSTARS's rights to require use of specific items relate only to maintenance of brand standards and trademark protection as required by federal law.
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- The Customer ceases to do business or is insolvent or bankrupt; or
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- The Customer moves outside of the Territory.
In such event, BUILDINGSTARS will offer FRANCHISEE a new customer account or increase an existing customer account with Monthly Contract Revenue of at least an equal dollar amount to the lost account's Monthly Contract Revenue. FRANCHISEE will not be entitled to any refund or reduction in Account Sales Fees already paid. In addition, FRANCHISEE will be required to continue to pay on the outstanding Account Sales Fee due in accordance with the Promissory Note.
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, franchisees are responsible for hiring and maintaining qualified employees for their business. While Buildingstars may provide sample employment policies, procedures, or examples, franchisees are not required to use them. Buildingstars makes no warranty that these sample documents comply with applicable federal, state, or local laws. The franchisor's right to require specific items relates only to maintaining brand standards and trademark protection.
The FDD states that Buildingstars will provide an initial training program for one of the Principal Owners and one other person. This training occurs after the Franchise Agreement is executed but before the business opens. The franchisee is responsible for covering all transportation, lodging, meals, and other expenses related to attending the training program. Buildingstars can terminate the Franchise Agreement if the franchisee's Principal Owners do not satisfactorily complete the training program; however, satisfactory completion does not guarantee the success of the business.
Regarding bankruptcy, the document states that if a customer ceases to do business or becomes insolvent or bankrupt, Buildingstars will offer the franchisee a new customer account or increase an existing one with at least an equal dollar amount of Monthly Contract Revenue to the lost account. The franchisee will not receive a refund or reduction in Account Sales Fees already paid and must continue to pay any outstanding Account Sales Fee according to the Promissory Note. This clause protects the franchisee from total revenue loss if a client declares bankruptcy. However, the franchisee is still responsible for the Account Sales Fees.