What happens in the event that a Buildingstars franchisee...
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 22: CONTRACTS]
- G. Inspections of Customer Premises. BUILDINGSTARS may make periodic quality control and customer relations visits to each customer account location of FRANCHISEE.
- H. Discontinue Right to Customer Account. BUILDINGSTARS retains the right to discontinue allowing FRANCHISEE to service a Customer Account at any time if BUILDINGSTARS, in its sole discretion, determines that FRANCHISEE is not adequately servicing the customer account. Factors which BUILDINGSTARS considers include, but are not limited to the following: Customer complaints, unresponsiveness to Customer or BUILDINGSTARS, allegations by Customer of theft or breakage, lateness or failure to complete the job in a professional manner. In such event, BUILDINGSTARS does not have any obligation to replace said Customer Account with another.
- I. Right to Audit. BUILDINGSTARS may, from time to time, cause one or more complete audits to be made of the affairs and records relating to the operations of the Business. Upon request by BUILDINGSTARS, FRANCHISEE shall make such books, records and information available to BUILDINGSTARS or its designated representative at all reasonable times for review and audit by BUILDINGSTARS at FRANCHISEE'S place of business. If it is found that FRANCHISEE underreported Gross Sales, FRANCHISEE will reimburse BUILDINGSTARS for the amount of the Royalty Fees, Account Sales Fees, Administration Fees, Insurance Program Fees and Management Fees charges that would have been billed had billings been reported accurately, plus interest on those amounts at the rate of the lesser of one and one-half percent (1-1/2%) per month or the maximum legal rate in the jurisdiction where the Business is located. In addition, in the event that an audit by BUILDINGSTARS results in a determination that any or all of the Royalty Fees, Account Sales Fees, Administration Fees, Insurance Program Fees and Management Fees paid to BUILDINGSTARS are deficient (underpaid) by more than two percent (2%), the FRANCHISEE shall promptly pay to BUILDINGSTARS any amounts shown to be due and all costs and expenses incurred by BUILDINGSTARS in conducting the subsequent
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, several contract clauses outline the actions and potential repercussions for a franchisee under various circumstances. Buildingstars retains the right to inspect customer premises periodically for quality control and customer relations. Buildingstars can discontinue a franchisee's right to service a customer account if they determine the franchisee is not adequately servicing the customer. Factors include customer complaints, unresponsiveness, allegations of theft or breakage, lateness, or failure to complete the job professionally. In such cases, Buildingstars is not obligated to replace the customer account.
Buildingstars may conduct audits of the franchisee's business records. If a franchisee is found to have underreported gross sales, they will be required to reimburse Buildingstars for the underpaid Account Sales Fees, Administration Fees, Royalty Fees, and Insurance Program Fees, plus interest. The interest rate will be the lesser of 1.5% per month or the maximum legal rate in the jurisdiction where the business is located. If the underpayment of these fees exceeds 2%, the franchisee must also cover all costs and expenses Buildingstars incurs in conducting a subsequent audit to verify correct reporting.
If a customer account is lost within the first six months because the customer ceases business, becomes insolvent or bankrupt, or moves outside the territory, Buildingstars will offer the franchisee a new customer account or increase an existing one with equivalent Monthly Contract Revenue. The franchisee will not receive a refund or reduction in Account Sales Fees already paid and must continue paying any outstanding Account Sales Fee according to the Promissory Note. The term of the franchise agreement is either three or five years, depending on the agreement, with options to renew if the franchisee is compliant and pays a renewal fee of either $1,000 or $2,000, respectively. However, Buildingstars may refuse renewal if the franchisee has a history of defaults, even if cured.