What is the frequency of payments required for the Buildingstars promissory note?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
BUILDINGSTARS or if FRANCHISEE is willing to accept a new customer account from BUILDINGSTARS, FRANCHISEE must pay BUILDINGSTARS an Account Sales Fee of four hundred percent (400%) of the Monthly Contract Revenue which is generated from the new customer account. The Account Sales Fee is payable in full even if FRANCHISEE loses the new customer account for any reason, however, BUILDINGSTARS will replace the lost new customer account only under the terms and conditions set forth in Section VI.J. below.
The Account Sales Fee is payable in cash or in the following manner:
- FRANCHISEE may request new customer accounts in increments of $1,000 of Monthly Contract Revenue. At such time as FRANCHISEE submits said request, FRANCHISEE shall pay BUILDINGSTARS $200 per $1,000 Monthly Contract Revenue it requested. This will serve as the
first monthly payment under the Promissory Note that finances the Account Sales Fee. The amount of the Promissory Note will be 400% of the Monthly Contract Revenue. The Promissory Note will be payable without interest in 20 equal monthly installments. For example, if FRANCHISEE requests new customer accounts which would generate $2,000 in Monthly Contract Revenue, it would pay $400 (1/20 of $2,000 x 400%) ("Monthly Payment") and sign a Promissory Note guaranteed by the Guarantors under this Agreement which will contain substantially the same terms and conditions as set forth in Exhibit III attached hereto. The second monthly payment will be due after the first full month FRANCHISEE has provided service to said new customer account. BUILDINGSTARS may withhold the monthly Promissory Note payments from the amount of billings BUILDINGSTARS collects for the FRANCHISEE, as more fully described in Section VI.D below. A default under the Promissory Note shall also be deemed a default under this Agreement.
- BUILDINGSTARS may, but is not required to, offer FRANCHISEE new customer accounts. If FRANCHISEE decides to accept the new customer account, which decision is solely within the FRANCHISEE'S discretion, FRANCHISEE must either pay the Account Sales Fee in cash or execute a Promissory Note guaranteed by the Guarantors under this Agreement substantially in the form set forth in Exhibit III for the amou
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, the frequency of payments for the promissory note depends on the specific scenario under which the note is issued. When a Buildingstars franchisee requests new customer accounts in increments of $1,000 of Monthly Contract Revenue, they will pay $200 per $1,000 Monthly Contract Revenue requested, which serves as the first monthly payment. The amount of the Promissory Note will be 400% of the Monthly Contract Revenue and will be payable without interest in 20 equal monthly installments.
If Buildingstars offers the franchisee new customer accounts, and the franchisee accepts, they must either pay the Account Sales Fee in cash or execute a Promissory Note. In this case, the Promissory Note is payable without interest in eighteen (18) monthly installments. In both scenarios, the first installment is due after the first full month the franchisee has provided service to the new customer account. Buildingstars may withhold the monthly Promissory Note payments from the amount of billings Buildingstars collects for the franchisee.
It is important to note that a default under the Promissory Note is also considered a default under the Franchise Agreement. This means that failing to make timely payments on the note could have serious consequences for the franchisee, including potential termination of the franchise agreement. Prospective franchisees should carefully consider their ability to meet these payment obligations before entering into a franchise agreement with Buildingstars.