If the transferee of a Buildingstars franchise finances the franchise fee, is that amount included in the calculation of the transfer fee?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
fications. The transferee must execute a new Franchise Agreement with the standard terms and conditions then being offered in the FRANCHISEE'S state by BUILDINGSTARS and the owners must execute a personal guarantee. Notwithstanding anything herein to the contrary, under n
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, the transfer fee is based on the total sales price of the interest being transferred. This calculation includes any amounts financed in place of the franchise fee.
Specifically, the transfer fee is the lesser of $4,000 or 10% of the total sales price. The sales price includes any down payments or amounts financed in lieu of the franchise fee. However, the transfer fee will not be less than $1,500.
For a prospective Buildingstars franchisee, this means that if the transferee finances the franchise fee as part of the transfer, that financed amount will be included when calculating the 10% of the total sales price, which determines the transfer fee. This could potentially increase the transfer fee, depending on the amount financed and the overall sales price of the franchise interest.