How does the Buildingstars Initial Franchise Fee (Item 5) compare to the ongoing fees outlined in Item 6?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
ptcies are required to be disclosed in this Item.
ITEM 5. INITIAL FEES
The amount of the Initial Franchise Fee depends upon the type of franchise program you are purchasing – Technician Program, On-Site Manager Program or Corporate Program. At the time you sign the Franchise Agreement, you must pay BUILDINGSTARS an Initial Franchise Fee in cash or, if you want us to finance it, we may do so under the terms and conditions explained below. The chart shows the Initial Franchise Fee for each program.
| | | Minimum | Monthly | Note | Length of | |-----------------------|----------------------------------------|--------------|----------|----------|-----------| | Type of Franchise | Total Initial Franchise Fee | Down Payment | Payments | Amount | Note | | TECHNICIAN | $995 (cash) | $695 | $100 | $600 | 6 months | | (Note 1) | $1,295 (financed) $6,995 (cash) | | | | | | ON-SITE MANAGER | $7,995 (financed) | $3,995 | $200 | $4,000 | 20 months | | (Note 2) | ($2,000 in Monthly Contract Revenue ) $36,995 (cash) | | | | | | CORPORATE | $46,995 (financed) | $6,995 | $2,000 | $40,000 | 20 months | | (Note 3) | ($10,000 in Monthly Contract Revenue) | | | | | You will receive a credit against the Initial Franchise Fee for the Corporate and On-Site Manager Program equal to the amount you paid for the Initial Franchise Fee and Account Sales Fees from the prior Program.
Note 1: Technician Program.
The Initial Franchise Fee is $1,295 which is payable when you sign the Franchise Agreement. If you prefer, we will finance a portion of the Initial Franchise Fee. You will pay us a down payment of $695 when you sign the Franchise Agreement and sign a Promissory Note for $600 in the form set forth in Exhibit I of the Franchise Agreement. The Note is payable without interest in 6 monthly installments of $100 each, with the first installment due on the 15th day of the month which is 90 days after execution of the Franchise Agreement. BUILDINGSTARS may withhold the monthly Note payments from the amount of billings BUILDINGSTARS collects for you, as more fully described in Sec. VI.D. of the Franchise Agreement.
If you are purchasing a Technician Program franchise, you may purchase a start-up package of equipment and supplies from one of our Affiliates at the time you sign the Franchise Agreement. The price of the start-up package is between $1,000 - $1,050.
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, the initial franchise fee varies depending on the program a franchisee chooses: Technician, On-Site Manager, or Corporate. For the Technician program, the initial fee is $1,295, but if paid in cash it is discounted to $995. The On-Site Manager program has an initial fee that consists of a Base Fee of $3,995 and a variable MCR Fee, which is either 150% or 200% of the Monthly Contract Revenue depending on whether it is financed. The Corporate program also has a Base Fee of $6,995 and an MCR Fee that is either 300% or 400% of the Monthly Contract Revenue depending on financing. These initial fees are one-time payments required to start the franchise.
In contrast, Buildingstars also charges ongoing fees. The most prominent of these is the Royalty Fee, which is 10% of Gross Sales, paid monthly. However, on Gross Sales attributable to Specialty Work, the Royalty Fee increases to 30%. There is also a Non-Performance Fee that is charged if Buildingstars' standards are not followed, resulting in a customer complaint that Buildingstars intervenes to resolve.
Thus, the initial franchise fee is a one-time startup cost, while the royalty and other fees are ongoing expenses that Buildingstars franchisees must factor into their operating budgets. The initial franchise fee can be a substantial upfront investment, especially for the On-Site Manager and Corporate programs, but the ongoing royalty fees can also significantly impact profitability over the long term. A prospective franchisee should carefully consider both the initial investment and the ongoing fees when evaluating the financial viability of a Buildingstars franchise.