If Buildingstars desires to utilize a financial performance representation, is the franchisee required to provide information, and at whose cost?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
- F. Cooperation for Financial Performance Representations. FRANCHISEE shall maintain its books and records in accordance with generally accepted accounting principles, consistently applied. If BUILDINGSTARS at any time desires to utilize a financial performance representation or similar document in connection with the sale of franchises, FRANCHISEE agrees to provide BUILDINGSTARS, at no cost, with such reasonable information as BUILDINGSTARS requires from FRANCHISEE in order to properly prepare such documents, and shall permit BUILDINGSTARS to utilize such information as it deems necessary.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, if Buildingstars wants to use a financial performance representation when selling franchises, franchisees must provide reasonable information to Buildingstars to help them prepare these documents.
Franchisees are required to maintain their financial records in accordance with generally accepted accounting principles. This ensures that the information provided to Buildingstars is accurate and reliable for creating the financial performance representation.
Importantly, the FDD states that the franchisee must provide this information to Buildingstars at no cost. This means the franchisee cannot charge Buildingstars for the time or resources spent gathering and providing the necessary financial data. Buildingstars is also permitted to use the information as it deems necessary.