How is 'Monthly Contract Revenues' defined for a Buildingstars franchise?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
The Initial Franchise Fee consists of two separate fees: a fixed fee ("Base Fee") and a variable fee ("MCR Fee"). The Base Fee is $3,995. The MCR Fee is 150% of the Monthly Contract Revenue. The MCR Fee is $3,000 ($2,000 Monthly Contract Revenue x 150%).
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.
Commencing as of the 13th month of FRANCHISEE operating the Business, FRANCHISEE must generate at least $20,000 in Monthly Contract Revenue each month for the remainder of the term of this Agreement (the "Minimum Revenue Requirement").
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, Monthly Contract Revenue is a key figure used in calculating various fees and obligations for franchisees. While the document does not explicitly define "Monthly Contract Revenue," it is used to calculate the MCR fee, Account Sales Fee, and Minimum Revenue Requirement.
The MCR Fee, a component of the initial franchise fee, is calculated as a percentage of the Monthly Contract Revenue. For instance, in one example, the MCR Fee is 150% of the Monthly Contract Revenue, resulting in a $3,000 fee based on $2,000 Monthly Contract Revenue. The Account Sales Fee is 400% of the Monthly Contract Revenue generated from new customer accounts provided by Buildingstars.
Furthermore, beginning in the 13th month of operation, a Buildingstars franchisee must generate at least $20,000 in Monthly Contract Revenue each month. Failure to meet this Minimum Revenue Requirement can result in Buildingstars modifying the franchisee's area or terminating the agreement. Since the FDD does not provide a specific definition, prospective franchisees should seek clarification from Buildingstars regarding exactly what constitutes "Monthly Contract Revenue" to ensure a clear understanding of their financial obligations and performance expectations.