How are the monthly payments calculated for the Buildingstars Promissory Note?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
s complaint is not adequately remedied, BUILDINGSTARS has the right, but not the obligation to remedy the complaint and charge FRANCHISEE a Non-Performance Fee of $25 per hour per person needed to resolve the complaint, plus any other actual out of pocket expenses incurred. BUILDINGSTARS will withhold the Non-Performance Fee from the amount of billings BUILDINGSTARS collects for the FRANCHISEE.
- D. Account Sales Fee. 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 two hundred percent (200%) of the Monthly Contract Revenue which is generated from the new customer account. The Account Sales Fee is payable in full even if FRANCHISEE loses the new customer account for any reason, however, BUILDINGSTARS will replace the lost new customer account only under the terms and conditions set forth in Section VI.J.
The Account Sales Fee is payable in cash or in the following manner:
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- FRANCHISEE may request new customer accounts in increments of $1,000 of Monthly Contract Revenue. At such time as FRANCHISEE submits said request, FRANCHISEE shall pay BUILDINGSTARS $100 for every $1,000 Monthly Contract Revenue it requested. This will serve as the first monthly payment under the Promissory Note in order to finance the Account Sales Fee. The amount of the Promissory Note will be 200% of the Monthly Contract Revenue. The Promissory Note will be payable without interest in 20 equal monthly installments. For example, if FRANCHISEE requests new customer accounts which would generate $2,000 in Monthly Contract Revenue, it would pay $200 (1/20 of $2,000 x 200%) ("Monthly Payment") and sign a Promissory Note guaranteed by the Guarantors under this Agreement which will contain substantially the same terms and conditions as set forth in Exhibit II. The second monthly payment will be due after the first full month FRANCHISEE has provided service to said new customer account. BUILDINGSTARS may withhold the monthly Promissory Note payments from the amount of billings BUILDINGSTARS collects for the FRANCHISEE, as more fully described in Sec. VI.D. below. A default under the Promissory Note shall also be deemed a default under this Agreement.
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- BUILDINGSTARS may, but is not required to, offer FRANCHISEE new customer accounts. If FRANCHISEE decides to accept the new customer account, which decision is solely within the FRANCHISEE'S discretion, FRANCHISEE must either pay the Account Sales Fee in cash or execute a Promissory Note guaranteed by the Guarantors under this Agreement substantially in the form set forth in Exhibit II for the amount of the Account Sales Fee. The Promissory Note is payable without interest in
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, the calculation of monthly payments for the Promissory Note depends on whether the franchisee requests new customer accounts or Buildingstars offers them. If a franchisee requests new customer accounts in increments of $1,000 of Monthly Contract Revenue, they will pay Buildingstars $100 for every $1,000 requested. This payment serves as the first monthly payment under the Promissory Note. The Promissory Note amount will be 200% of the Monthly Contract Revenue and is payable in 20 equal monthly installments without interest. For example, if a franchisee requests new customer accounts generating $2,000 in Monthly Contract Revenue, the first monthly payment would be $200, calculated as 1/20 of $2,000 multiplied by 200%.
Alternatively, Buildingstars may offer new customer accounts to the franchisee. If the franchisee accepts, they can either pay the Account Sales Fee in cash or execute a Promissory Note for the amount of the Account Sales Fee. This Promissory Note is also payable without interest in twenty monthly installments. The first installment is due after the first full month the franchisee provides service to the new customer account. Buildingstars can withhold the monthly Promissory Note payments from the billings they collect for the franchisee.
It's important to note that a default on the Promissory Note is considered a default under the Franchise Agreement. The franchisee is also required to continue paying the outstanding Account Sales Fee according to the Promissory Note, even if a customer account is lost and replaced by Buildingstars. This financial arrangement highlights the franchisee's ongoing financial commitment and the importance of maintaining good standing with Buildingstars to avoid defaulting on the agreement.