What is included in the variable lease expenses for Buildingstars, and how are these expenses handled?

According to Buildingstars's 2025 Franchise Disclosure Document, variable lease expenses include payments that fluctuate based on changes in rates or indexes, such as consumer price indexes. These expenses also encompass the usage of the leased asset, utilities, real estate taxes, insurance, and variable common area maintenance. Buildingstars expenses these variable costs as they are incurred.

This means that as a Buildingstars franchisee, your lease expenses could change over time due to factors outside of a fixed rental rate. For example, if the consumer price index increases, the portion of your lease tied to that index would also increase, raising your overall expenses. Similarly, changes in utility costs, real estate taxes, or insurance premiums would directly impact your variable lease expenses.

It's important for prospective Buildingstars franchisees to carefully review the lease agreements to understand how these variable expenses are calculated and what factors could cause them to fluctuate. Budgeting for these potential changes is crucial for maintaining financial stability. Understanding these variable costs allows franchisees to better predict and manage their operating expenses, contributing to more accurate financial planning and potentially mitigating risks associated with unforeseen cost increases.

The document also mentions that Buildingstars's lease agreements do not contain any material residual value guarantees or material restrictive covenants. This indicates that franchisees are not typically responsible for guaranteeing the residual value of the leased property at the end of the lease term, and there are no significant restrictions placed on the use of the leased property beyond typical lease terms.