Can Buildingstars immediately terminate the franchise if the franchisee is convicted of a felony?
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 the 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.
This immediate termination clause is significant for prospective Buildingstars franchisees. It means that a criminal conviction, particularly one that reflects poorly on the business, could lead to the immediate loss of their franchise. Franchisees should be aware of this risk and ensure they maintain a clean criminal record to protect their investment.
It is important to note that the ability to terminate immediately is subject to state law. Some states may require a notice and cure period even in cases of felony convictions. Therefore, franchisees should consult with legal counsel to understand their rights and obligations under the franchise agreement and applicable state laws.
Besides a felony conviction, Buildingstars can also terminate the franchise immediately, if state law permits, for reasons such as fraudulent activity, abandonment of the franchise, bankruptcy or insolvency of the franchisee, giving more than two insufficient funds checks within a year, or failing to meet the Minimum Revenue Requirement in any month.