How many renewal terms are Buildingstars franchisees eligible for if they are in full compliance with the agreement?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
elopment Fee. If during the term of this Agreement and within one year after termination, expiration or transfer of this Agreement, FRANCHISEE or any employee or affiliate of FRANCHISEE shall perform for any Customer services similar to those to be performed under this Agreement but performed outside of this Agreement, FRANCHISEE shall pay to BUILDINGSTARS a fee equal to 3 times the monthly amount agreed to be paid to FRANCHISEE, its employee or affiliate of FRANCHISEE, for such services.
V. TERM
The term of this Agreement shall be for a period of five (5) years from the date of final execution, unless sooner terminated in accordance with this Agreement. If FRANCHISEE is in full compliance with the terms of this Agreement, FRANCHISEE shall have the right to renew for three (3) additional terms of five (5) years each, provided that FRANCHISEE is not in default under this Agreement at the time of each renewal, FRANCHISEE executes the most current franchise agreement being utilized by BUILDINGSTARS and FRANCHISEE pays BUILDINGSTARS a renewal fee of $2,000. Notwithstanding the foregoing, BUILDINGSTARS may, in its discretion, refuse to renew the Franchise if FRANCHISEE has been notified of defaults (even if subsequently cured) under the Franchise Agreement more than two (2) times during the initial term or more than three (3) times during any renewal term, even if FRANCHISEE is not in default at the time of such renewal, or if FRANCHISEE has not been in full compliance with the Minimum Revenue Requirement. The then current franchise agreement may contain significantly different terms than this Agreement. On renewal, BUILDINGSTARS is under no obligation to provide FRANCHISEE with any new customer accounts. FRANCHISEE agrees to give BUILDINGSTARS not less than one hundred twenty (120) days written notice of its desire to renew the franchise, prior to the end of the initial term or the renewal term. In the event that BUILDINGSTARS elects not to renew, BUILDINGSTARS shall give FRANCHISEE written notice within nin
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, franchisees in full compliance with their franchise agreement have the option to renew for additional terms. However, the length of the initial term and renewal terms, as well as the renewal fee, can vary. One version of the agreement specifies an initial term of five years with the possibility of three additional five-year renewal terms, provided the franchisee isn't in default, executes the current franchise agreement, and pays a $2,000 renewal fee. Another version details an initial term of three years, with the option to renew for three additional three-year terms, again contingent on compliance, execution of the current agreement, and payment of a $1,000 renewal fee.
Buildingstars retains the discretion to deny renewal if the franchisee has received default notices, even if those defaults were later resolved. The FDD states that more than two default notices during the initial term or more than three during any renewal term can be grounds for non-renewal, regardless of whether the franchisee is in default at the time of renewal. Also, Buildingstars may refuse renewal if the franchisee has not been in full compliance with the Minimum Revenue Requirement.
It's important to note that the terms of the franchise agreement in effect at the time of renewal may differ significantly from the original agreement. Buildingstars is not obligated to provide renewing franchisees with new customer accounts. Franchisees must provide Buildingstars with at least 120 days' written notice of their intent to renew before the end of the current term. If Buildingstars decides not to renew, they must notify the franchisee in writing at least 90 days before the agreement's expiration.
If a new franchise agreement isn't executed upon expiration and Buildingstars hasn't indicated an intent not to renew, the agreement will continue on a month-to-month basis, which can be terminated by either party with 30 days' written notice. Prospective franchisees should clarify which version of the franchise agreement they will be signing and carefully review the renewal terms, conditions, and potential for changes in the agreement at the time of renewal.