If a Buildingstars franchisee's owner is convicted of a felony, can Buildingstars terminate the agreement immediately?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding anything contained herein to the contrary, if state law permits, BUILDINGSTARS shall be permitted to terminate the franchise immediately upon notice when the basis or grounds for cancellation is: (a) FRANCHISEE or its owners are convicted of a felony or any other criminal misconduct which materially and adversely affects the operation, maintenance, reputation, or goodwill of the franchise; (b) fraudulent activity which materially and adversely affects the operation, maintenance, reputation, or goodwill of the franchise; (c) abandonment of the franchise; (d) bankruptcy or insolvency of the FRANCHISEE; (e) the giving of more than two (2) no account or insufficient funds checks within a twelve-month period; or (f) failing to generate the Minimum Revenue Requirement in any month; or (g) any other act or omission which permits termination without notice and/or an opportunity to cure under applicable state law.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, Buildingstars can terminate the franchise agreement immediately if a franchisee or its owners are convicted of a felony. However, this is contingent on state law permitting such immediate termination. The felony or criminal misconduct must also materially and adversely affect the operation, maintenance, reputation, or goodwill of the franchise.
Buildingstars can also terminate the franchise agreement immediately if there is fraudulent activity, abandonment of the franchise, or bankruptcy or insolvency of the franchisee. Other reasons for immediate termination include giving more than two insufficient funds checks within a year, or failing to meet the Minimum Revenue Requirement in any month. These terminations without an opportunity to cure are contingent on state law.
Typically, franchise agreements allow for a cure period, giving the franchisee time to correct the issue before termination. The Buildingstars franchise agreement provides for termination with 90 days written notice, including a 30-day period to correct any deficiency. However, certain severe breaches, such as a felony conviction, allow Buildingstars to bypass this cure period if state law allows.
Prospective Buildingstars franchisees should be aware of the conditions under which Buildingstars can immediately terminate the agreement. It is important to understand the specific state laws governing franchise agreements in their area, as these laws can impact the enforceability of the immediate termination clause. Franchisees should also ensure they maintain ethical business practices and avoid any actions that could be construed as fraudulent or detrimental to the Buildingstars brand.