What happens if Buildingstars withholds approval of a Buildingstars franchise transfer?

According to Buildingstars' 2025 Franchise Disclosure Document, if Buildingstars wrongfully withholds consent for a franchise transfer, the franchisee's sole remedy is to require Buildingstars to grant such consent. This means that a franchisee cannot sue Buildingstars for damages or other compensation if Buildingstars improperly denies a transfer request. The franchisee's only recourse is to compel Buildingstars to approve the transfer.

Buildingstars can withhold consent to a transfer if the transferee does not meet certain conditions. These conditions include the transferee meeting the standards for new franchisees, possessing good moral character, having a good credit rating and sufficient financial resources, and having competent qualifications. The transferee must also execute a new Franchise Agreement with standard terms and conditions and provide a personal guarantee. Buildingstars can also withhold consent if the transfer would give control of the business to someone they disapprove of, if the franchisee is in default, if the transferor hasn't met their financial obligations to Buildingstars, or if the terms of the sale aren't economically feasible for the proposed assignee.

This arrangement significantly limits the franchisee's options if a transfer is blocked. While the franchisee can force Buildingstars to reconsider and potentially approve the transfer, they cannot seek financial remedies for any losses incurred due to the delay or denial. This could be particularly problematic if the delay causes a potential buyer to withdraw their offer or if the franchisee incurs additional expenses as a result of the stalled transfer.

It is important for prospective Buildingstars franchisees to understand this limitation and to carefully consider the conditions under which Buildingstars can withhold consent. Franchisees should ensure that any potential transferees meet these requirements to minimize the risk of a transfer being denied. Additionally, franchisees should seek legal advice to fully understand their rights and obligations regarding franchise transfers.