What obligations does a Buildingstars franchisee have upon termination or non-renewal of the franchise agreement?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY |
|---|---|---|
| 1 year for Technician's Franchise Agreement; 3 years for On-Site Manager | ||
| a. Term of the franchise | Section V | Franchise Agreement and 5 years for Corporate Franchise Agreement. |
| b. Renewal or extension | Section V | 3 renewals for 1 year each for Technician Franchise Agreement, however, if a new franchise agreement is not signed, the original franchise agreement continues on a month-to-month basis; 3 renewals for 3 years each for On-Site Manager Franchise Agreement and 3 renewals of 5 years each for Corporate Franchise Agreement - all subject to terms of Section V of the Franchise Agreement. |
| c. Requirement for franchisee to renew or extend | Section V | Give notice, sign the then current franchise agreement, and pay a renewal fee. The then current franchise agreement may contain terms and conditions materially different from those in your previous franchise agreement, such as different fee requirements. Corporate Program franchises must also have been in full compliance with the Minimum Revenue Requirements. |
| d. Termination by franchisee | Section XI.B | If we breach agreement and do not cure or attempt to cure after notice |
| e. Termination by franchisor without cause | Not Applicable | Not Applicable |
| f. Termination by franchisor with cause | Sections XI.A | If you don't satisfactorily complete training or generally if you breach agreement |
| g. "Cause" defined- curable defaults | Section XI.A | You have 10 days to cure monetary defaults and failure to comply with the Conditions of Grant under the Technician Franchise Agreement and 30 days to cure all others except those listed in Sect. XI.A.3 of the Franchise Agreement. |
| h. "Cause" defined – non-curable defaults | Section XI.A.3 | Non-curable defaults: conviction of a felony, repeated defaults even if cured, failing to comply with the Minimum Revenue Requirement, bankruptcy, fraud, issuance of 2 or more insufficient funds checks and abandonment |
| I. Franchisee's obligation on termination or non-renewal | Section XIII | Complete de-identification and payment of amounts due, return materials, Manual, direct transfer of phone |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 29–31)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, Item 17 outlines the franchisee's obligations upon termination or non-renewal. Specifically, Section XIII of the Franchise Agreement details these responsibilities. Upon termination or non-renewal, a Buildingstars franchisee must complete the de-identification process, which involves removing all Buildingstars branding and signage from their business operations. They are also required to pay all outstanding amounts owed to Buildingstars.
Additionally, the franchisee must return all materials, including the Operations Manual, to Buildingstars. The franchisee is also obligated to direct the transfer of the phone number associated with the franchise to Buildingstars. These obligations ensure that the franchisee ceases to operate as a Buildingstars franchise and that all proprietary information and assets are returned to the franchisor.
These requirements are fairly standard in the franchise industry, as franchisors typically want to ensure a clean break and protect their brand and proprietary information when a franchise agreement ends. Prospective Buildingstars franchisees should carefully review Section XIII of the Franchise Agreement to fully understand their obligations upon termination or non-renewal and to ensure they are prepared to meet these requirements should the franchise agreement end.