Who must guarantee the Promissory Note for the Buildingstars Account Sales Fee?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
uch time as FRANCHISEE submits said request, FRANCHISEE shall pay BUILDINGSTARS $100 for every $1,000 Monthly Contract Revenue it requested. This will serve as the first monthly payment under the Promissory Note in order to finance the Account Sales Fee. The amount of the Promissory Note will be 200% 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 $200 (1/20 of $2,000 x 200%) ("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 II.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, the Promissory Note for the Account Sales Fee must be guaranteed by the Guarantors under the Franchise Agreement. This requirement applies whether the franchisee requests new customer accounts or Buildingstars offers new customer accounts to the franchisee.
In practical terms, this means that someone other than the franchisee (the Guarantor) is taking on the responsibility to ensure the Promissory Note is paid. This is a common practice to provide the franchisor with additional security. The specific individuals or entities that must act as Guarantor are defined within the Franchise Agreement itself.
A prospective Buildingstars franchisee should carefully review the Franchise Agreement and consult with legal counsel to fully understand the obligations and liabilities of the Guarantor. It is important to identify who is eligible and willing to act as a Guarantor and to ensure they understand the financial commitment they are undertaking.
Specifically, prospective franchisees should clarify with Buildingstars who qualifies as a 'Guarantor' under the agreement. They should also review Exhibit III (or Exhibit II, depending on which clause applies) of the Franchise Agreement, as referenced in the FDD, to understand the terms and conditions of the Promissory Note and Guarantee.