How does the Buildingstars Initial Franchise Fee (Item 5) relate to the other fees a franchisee might incur (Item 6)?

[Item 5: INITIAL FEES]

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. You can either pay the amount of the start-up package in full when you purchase it, or you may pay us a down payment of $100 at the time you sign the Franchise Agreement and pay us the balance in 3 equal monthly payments thereafter. We will withhold these monthly payments from the amount of billings which we collect on your behalf and pay our Affiliate for you.

• A. Royalty Fee. FRANCHISEE shall pay to BUILDINGSTARS, monthly (by the fifteenth (15th) day of the month following the month in which the sales were invoiced), a Royalty Fee equal to ten percent (10%) of Gross Sales from the Business throughout the term of this Agreement. For example, the Royalty Fee for February is payable by March 15th. BUILDINGSTARS will withhold the Royalty Fee from the amount of billings BUILDINGSTARS collects for the FRANCHISEE, as more fully described in Section VI.D below. No part of the Royalty Fee is refundable. Notwithstanding the foregoing, FRANCHISEE shall pay a Royalty Fee of thirty percent (30%) instead of ten percent (10%) on the Gross Sales attributable to Specialty Work.
• B. Non-Performance Fee. In order to encourage full attention to Customer needs, a Non-Performance Fee will be charged if BUILDINGSTARS' standards have not been followed resulting in a Customer's complaint in which BUILDINGSTARS intervenes to resolve. If BUILDINGSTARS receives a bona fide complaint from a Customer, BUILDINGSTARS will first offer FRANCHISEE an opportunity to remedy the Customer's complaint. If FRANCHISEE remedies the complaint within a twenty-four (24) hour period after BUILDINGSTARS is notified of the Customer's complaint, BUILDINGSTARS will not charge FRANCHISEE a Non-Performance Fee. However, if after the twenty-four (24) hour period the Customer's complaint is not adequately remedied, BUILDINGSTARS has the right, but not the obligation to remedy the complaint and charge FRANCHISEE a Non-Performance Fee of $25 per hour per person needed to resolve the complaint, plus any other actual out of pocket expenses incurred. BUILDINGSTARS will withhold the Non-Performance Fee from the amount of billings BUILDINGSTARS collects for the FRANCHISEE.
• C. Account Sales Fee. If FRANCHISEE requests new customer accounts from BUILDINGSTARS or if FRANCHISEE is willing to accept a new customer account from BUILDINGSTARS, FRANCHISEE must pay BUILDINGSTARS an Account Sales Fee of four hundred percent (400%) of the Monthly Contract Revenue which is generated from the new customer account. The Account Sales Fee is payable in full even if FRANCHISEE loses the new customer account for any reason, however, BUILDINGSTARS will replace the lost new customer account only under the terms and conditions set forth in Section VI.J. below.