What liabilities and obligations must the transferee of a Buildingstars franchise assume?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
circumstances will BUILDINGSTARS will be obligated to replace any customer account that have been transferred pursuant to the Transfer of Interest.
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- Transfer Fee. The transferee pays a transfer fee of the lesser of: (i) $4,000; or (ii) 10% of the total sales price of the Interest being transferred including any down payments or amounts financed in lieu of the Franchise Fee, but in no event will the transfer fee be less than $1,500;
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- Assumption of Liabilities. The transferee agrees to assume all liabilities and obligations from the prior operation of the Business, including the lease, and complies with other reasonable requirements BUILDINGSTARS may impose;
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- Completion of Training and Experience of Transferee. The transferee and/or transferee's management team, including a designated manager, must successfully complete the initial training program. In addition, BUILDINGSTARS can withhold consent if the transferee does not have adequate previous management experience, in BUILDINGSTARS' sole judgment, in order to fulfill the obligations of the FRANCHISEE;
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- Continuing Liability.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, a transferee of a Buildingstars franchise must agree to assume all liabilities and obligations from the prior operation of the business. This includes assuming the lease and complying with any other reasonable requirements that Buildingstars may impose.
In addition to assuming liabilities, the transferee, or their management team, including a designated manager, must successfully complete the initial training program. Buildingstars can also withhold consent for the transfer if the transferee does not have adequate previous management experience, as determined by Buildingstars, to fulfill the obligations of a franchisee.
Furthermore, the transferee must meet the established standards for new franchisees, demonstrating good moral character, a good credit rating, sufficient financial resources to operate the business, and competent qualifications. The transferee is also required to execute a new Franchise Agreement with the standard terms and conditions then being offered in the franchisee's state, and the owners must execute a personal guarantee. These conditions ensure that the transferee is well-prepared and qualified to continue operating the Buildingstars franchise successfully.