Are Buildingstars' representations in the franchise disclosure document disclaimed by the franchise agreement?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
- K.
No Warranty.
FRANCHISEE acknowledges that, except as otherwise specifically stated herein, BUILDINGSTARS has the absolute right to exercise its own judgment on various matters about this Agreement and the Manual, and has the absolute right to approve, disapprove, give its consent and refuse to consent to FRANCHISEE'S requests in its sole and absolute discretion.
FRANCHISEE agrees that BUILDINGSTARS' action, refusal to act, approval, disapproval, consent, or refusal of consent is not, and shall not be deemed, a representation, warranty, certification or guarantee by BUILDINGSTARS about that which is acted upon or refused consent, or about any appropriateness, legality, profitability, or success related thereto.
No BUILDINGSTARS action, refusal to act, approval, disapproval, consent or refusal to consent is, or shall be deemed, a guarantee, warranty, or representation that the Business complies with, or meets any local, municipal, state, federal, or other laws or regulations relating to the offer of services or otherwise.
If it is found that BUILDINGSTARS wrongfully withheld any consent pursuant to this Agreement, FRANCHISEE'S sole remedy for such failure shall be to require BUILDINGSTARS to grant such consent.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, the franchise agreement includes a "No Warranty" clause. This clause stipulates that Buildingstars has the right to exercise its judgment on matters related to the agreement and the manual, including approvals, disapprovals, and consents. Buildingstars' actions or inactions are not considered representations, warranties, certifications, or guarantees regarding the appropriateness, legality, profitability, or success of the franchise.
Specifically, Buildingstars' actions, refusals to act, approvals, disapprovals, consents, or refusals of consent do not constitute a guarantee, warranty, or representation that the business complies with local, municipal, state, federal, or other laws or regulations related to the services offered. This means that franchisees cannot hold Buildingstars liable for any issues arising from these matters, except if Buildingstars wrongfully withholds consent, in which case the franchisee's sole remedy is to require Buildingstars to grant such consent.
This disclaimer is a significant consideration for potential Buildingstars franchisees. It clarifies that Buildingstars does not guarantee the franchisee's success or compliance with all applicable laws and regulations. Franchisees must rely on their own due diligence and expertise to ensure their business operations are compliant and profitable. This type of clause is relatively common in franchise agreements, as franchisors seek to limit their liability and ensure franchisees take responsibility for their own business outcomes.