If Buildingstars discontinues a franchisee's right to service a customer account, is Buildingstars obligated to replace that account with another?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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.
- J. Replacement of Customer Accounts. So long as FRANCHISEE is in compliance with the Franchise Agreement, BUILDINGSTARS will replace any initial customer account or new customer account upon the occurrence of any of the following events, if any such event occurs within the first six (6) months from the date FRANCHISEE began servicing the lost Customer:
-
- The Customer ceases to do business or is insolvent or bankrupt; or
-
- The Customer moves outside of the Territory.
-
In such event, BUILDINGSTARS will offer FRANCHISEE a new customer account or increase an existing customer account with Monthly Contract Revenue of at least an equal dollar amount to the lost account's Monthly Contract Revenue. FRANCHISEE will not be entitled to any refund or reduction in Account Sales Fees already paid. In addition, FRANCHISEE will be required to continue to pay on the outstanding Account Sales Fee due in accordance with the Promissory Note.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, Buildingstars retains the right to discontinue a franchisee's service of a customer account if Buildingstars determines, in its sole discretion, that the franchisee is not adequately servicing the customer. Factors Buildingstars considers include customer complaints, unresponsiveness, allegations of theft or breakage, lateness, or failure to complete the job professionally.
In the event Buildingstars discontinues a franchisee's right to service a customer account, Buildingstars is not obligated to replace the discontinued customer account with another. This means a franchisee could lose income if Buildingstars determines they are not adequately servicing an account.
However, Buildingstars will replace an initial or new customer account if the customer ceases to do business, becomes insolvent or bankrupt, or moves outside the territory within the first six months of service. In these specific instances, Buildingstars will offer a new customer account or increase an existing account with monthly contract revenue of at least an equal dollar amount to the lost account. The franchisee will not receive a refund or reduction in Account Sales Fees already paid and must continue to pay on any outstanding Account Sales Fee according to the Promissory Note.