If the Buildingstars franchisee is a partnership, are all partners and their spouses obligated under the franchise agreement?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
ted at the time the services or products from which they were derived are delivered or rendered. The term does not include applicable sales, use or service taxes and any refunds and allowances actually given to Customers.
- E. "FRANCHISEE" shall be deemed to include: (a) all persons and their spouses owning any interest in FRANCHISEE if it is a corporation or a limited liability company; (b) all partners and
their spouses owning any interest in FRANCHISEE if it is a partnership; and (c) all of the individuals and their spouses owning any interest in FRANCHISEE if it is a sole proprietorship. For purposes of determining ownership in a franchise, the interests owned by a husband and wife shall be considered one interest, and both husband and wife shall be obligated hereunder, regardless of whether the interest is owned by just one spouse or both spouses.
- F. "Interest" means: (a) this Agreement or the rights under this Agreement; (b) the rights in the Business;
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, if the franchisee is a partnership, all partners are considered Principal Owners and are obligated under the franchise agreement. Additionally, for ownership determination, the interests owned by a husband and wife are considered as one interest, making both husband and wife obligated under the agreement, regardless of whether the interest is owned by just one spouse or both spouses. This ensures that Buildingstars has recourse to all partners and their spouses who have an interest in the franchise, strengthening the franchisor's position.
This requirement means that all partners in a Buildingstars franchise, along with their spouses, must understand and agree to the terms of the franchise agreement. Each individual's assets could be at risk if the franchise fails or breaches the agreement. This is a significant consideration for potential franchisees, as it extends the liability beyond just the direct partners to their spouses.
Buildingstars also holds two or more persons who are the franchisee under the Agreement jointly and severally liable. This means that each individual is fully responsible for the entire debt or obligation. Buildingstars can pursue any one of them for the full amount owed, regardless of their individual share or contribution. This clause is designed to protect Buildingstars's interests by ensuring that there are multiple parties responsible for fulfilling the obligations of the franchise agreement.