Can Buildingstars modify a franchisee's area if they fail to meet the Minimum Revenue Requirement?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
d fully paid license to use and sublicense the use of the ideas, concepts, techniques or materials.
- H. Financial Records and Reports. FRANCHISEE agrees to furnish to BUILDINGSTARS financial reports as shall be requested by BUILDINGSTARS from time to time pursuant to or in connection with this Agreement or as specified in the Confidential Operations Manual. FRANCHISEE shall establish a business checking account and will continue to maintain a business checking account throughout the term of this Agreement.
- I. Minimum Revenue Requirement. Commencing as
Source: Item 12 — TERRITORY (FDD pages 26–27)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, Buildingstars has the right to modify a franchisee's area if they fail to meet the Minimum Revenue Requirement. Specifically, beginning in the 13th month of operating the Buildingstars business, a franchisee must generate at least $20,000 in Monthly Contract Revenue each month. This is referred to as the "Minimum Revenue Requirement".
If a Buildingstars franchisee fails to meet this Minimum Revenue Requirement in any month, Buildingstars has the option to modify the franchisee's area. This modification can occur in addition to any other rights and remedies Buildingstars has available. Importantly, Buildingstars can take this action without providing the franchisee an opportunity to correct the deficiency.
This clause in the Buildingstars franchise agreement is significant for potential franchisees. It means that failing to meet the minimum revenue target can lead to a reduction in the franchisee's territory, which could further impact their ability to generate revenue. The fact that Buildingstars does not have to offer a cure period before modifying the territory adds to the risk for the franchisee.