What is the minimum total value of initial customer accounts that Buildingstars will offer to a franchisee?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
elinquent Customers on a monthly basis. Once a month BUILDINGSTARS will provide FRANCHISEE a Monthly Revenue Statement. FRANCHISEE hereby authorizes BUILDINGSTARS to collect cash and other forms of payment from accounts to which FRANCHISEE has rendered services or products, endorse FRANCHISEE'S name on and deposit checks, sign its name on liens, and take any other action necessary to carry out the terms of this Agreement.
FRANCHISEE further authorizes BUILDINGSTARS to deduct from payments BUILDINGSTARS collects from the Customers the fees described in Sections III and IV of this Agreement and any other amounts due to BUILDINGSTARS, any authorized insurance payments, and any out-of-pocket costs (including but not limited to attorney's fees and court costs) incurred by BUILDINGSTARS in enforcing payment of accounts by Customers, FRANCHISEE or FRANCHISEE'S guarantors. BUILDINGSTARS will collect all payments actually received and disburse the amount due to FRANCHISEE in accordance with the procedures set forth in the Confidential Operations Manual.
b. Collections. FRANCHISEE must pay for all reasonable attorneys' fees, court costs, expenses, and out-of-pocket costs incurred to enforce collection from Customers. If a Customer is delinquent in payment, FRANCHISEE is responsible for any and all collection activities. BUILDINGSTARS is not obligated to hire attorneys, commence litigation, or do any acts (other than to send scheduled statements) in order to enforce payment of accounts by Customers. The only collection activities BUILDINGSTARS is required to provide are ongoing phone contact and reminder notices both
mailed and faxed to delinquent Customers on a monthly basis for such time as BUILDINGSTARS deems appropriate.
- c. Application of Payments. FRANCHISEE agrees to immediately deliver to BUILDINGSTARS any and all money collected from its Customers.
- d. Taxes. FRANCHISEE is and will continue to be responsible for complying with all local, state and federal tax requirements including but not limited to income tax, sales tax, use tax or any other tax required along with the proper reporting requirements.
- E. Offering Period for Initial Customer Accounts. BUILDINGSTARS shall offer FRANCHISEE initial customer accounts totaling at least Two Thousand Dollars ($2,000). The period
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, Buildingstars is obligated to offer a new franchisee initial customer accounts totaling at least $2,000. This offering of initial customer accounts will occur during what is called the "Initial Customer Accounts Offering Period" or "ICA Offering Period", which begins when the franchisee starts operations, as described in Section VII.A of the agreement.
The "ICA Offering Period" lasts for 90 days for the first $1,000 in Monthly Contract Revenue. After that, Buildingstars has an additional 30-day period for each additional $1,000 in Monthly Contract Revenue. This means that Buildingstars has a defined time frame to provide the franchisee with the minimum value of customer accounts.
It's important to note that while Buildingstars is obligated to offer this minimum amount, the franchisee is not obligated to accept any customer accounts offered. However, once Buildingstars has offered accounts totaling the amount requested by the franchisee corresponding to the Initial Franchise Fee paid, Buildingstars' obligation to provide initial customer accounts is satisfied, regardless of whether the franchisee accepts them or not. This highlights the importance of carefully evaluating each account offered during the ICA Offering Period.