Does Buildingstars require approval for a franchisee to transfer their franchise?
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 |
| j. Assignment of contract by franchisor | Section XIII.A | No restrictions on right to assign |
| k. "Transfer" by franchisee-definition | Section XIII.B | Consent of us |
| l. Franchisor approval of transfer by franchisee | Section XIII.B | Right to approve all transfers |
| m. Conditions for franchisor approval of transfer | Section XIII.B | Transferee qualifies, transfer fee paid, new franchise agreement signed, training of transferee, release signed |
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, Buildingstars requires franchisee to get their consent to transfer the franchise. Buildingstars retains the right to approve all transfers.
Specifically, Buildingstars outlines conditions that must be met for them to approve a transfer. These conditions include ensuring the transferee meets Buildingstars's qualifications, payment of a transfer fee, the signing of a new franchise agreement by the transferee, and completion of training by the transferee. Additionally, a release must be signed as part of the transfer process.
These stipulations are typical in franchising, as franchisors like Buildingstars need to maintain brand standards and ensure that new franchisees are capable and properly trained. The transfer fee compensates Buildingstars for their time and expenses in approving the transfer and training the new franchisee. The new franchise agreement ensures that the transferee is bound by the current terms and conditions of the Buildingstars franchise system.