What was the net employee retention credit for Buildingstars in 2023?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
86,511 | | Retained earnings | 2,302,263 | 2,930,029 | 2,016,751 | | | 3,689,274 | 4,317,040 | 3,403,762 | | | $ 14,462,992 | $ 13,329,754 | $ 10,891,934 | | | | | |
BUILDINGSTARS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME
| Years Ended December 31, | |||||
|---|---|---|---|---|---|
| 2024 | 2023 | 2022 | |||
| REVENUE | $ 83,617,433 | $ 76,205,348 | $ 70,164,196 | ||
| COST OF REVENUE | 60,705,321 | 55,325,794 | 50,810,089 | ||
| GROSS MARGIN | 22,912,112 | 20,879,554 | 19,354,107 | ||
| OPERATING EXPENSES | 13,674,903 | 12,509,619 | 11,453,047 | ||
| General and administrative expenses |
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 34–43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, the company recorded a net employee retention credit of $327,366 in 2023. The Employee Retention Credit (ERC) was established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act and amended by the Consolidated Appropriations Act (CAA) and the American Rescue Plan (ARP). It is a credit against certain payroll taxes for qualifying wages paid by eligible employers.
Buildingstars elected to account for the ERC as a conditional grant, meaning they only recognize the benefit if they meet the eligibility requirements. Employers who qualified could claim a tax credit against 70% of qualified wages paid between March 13 and December 31, 2020, up to $10,000 per employee annually. The availability of this credit was extended through December 31, 2021, by the Consolidated Appropriations Act of 2021.
The FDD notes that laws and regulations concerning government programs like the ERC are complex and subject to interpretation. Claims made under the CARES Act may face retroactive audits and reviews. Therefore, there is no guarantee that regulatory authorities will not challenge Buildingstars's claim to the ERC. This means that the $327,366 credit recorded in 2023 could potentially be subject to adjustment or clawback if the company's eligibility is challenged.