If Buildingstars withholds approval for a transfer, will Buildingstars notify the Buildingstars franchisee of the reasons?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
Although BUILDINGSTARS will not be required to determine the value of business upon a Transfer, if in BUILDINGSTARS' reasonable judgment, the purchase price or terms of the sale are not economically feasible to the proposed assignee, BUILDINGSTARS can withhold its consent to such an assignment or Transfer.
Further, BUILDINGSTARS may, in good faith, notify FRANCHISEE, stating the reasons that BUILDINGSTARS has elected to withhold approval of the proposed Transfer.
Notwithstanding the foregoing, BUILDINGSTARS' approval of the Transfer shall not be deemed to imply or warrant that the purchase price or terms of sale are economically feasible, and BUILDINGSTARS hereby disclaims any responsibility for making any such determination.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, Buildingstars has the option to inform the franchisee about the reasons for withholding approval of a proposed transfer. Buildingstars is not obligated to determine the value of the business during a transfer. However, if Buildingstars believes the purchase price or terms of the sale are not economically feasible for the proposed assignee, they can withhold consent.
In such cases, Buildingstars may, in good faith, notify the franchisee of the reasons behind their decision to withhold approval. This notification is not a requirement, but rather something Buildingstars may choose to do.
This clause protects Buildingstars from potential disputes arising from a rejected transfer, as it allows them to provide a rationale for their decision. However, the FDD also explicitly states that Buildingstars' approval of a transfer does not imply any warranty or guarantee regarding the economic feasibility of the purchase price or terms of sale, and Buildingstars disclaims any responsibility for making such determinations.