Can Buildingstars require the franchisee to remain liable for the obligations of the assignee after a Buildingstars franchise transfer?

According to Buildingstars's 2025 Franchise Disclosure Document, Buildingstars retains the discretion to require the franchisee and any guarantors to remain liable for the obligations of the assignee, even after Buildingstars approves the franchise assignment.

This means that if a franchisee sells their Buildingstars franchise, Buildingstars has the right to demand that the original franchisee (and their guarantors) continue to be responsible for ensuring the new franchisee fulfills all obligations under the franchise agreement. This could include financial obligations, adherence to operational standards, and other contractual requirements.

This clause creates a significant risk for franchisees who transfer their business. Even after selling, they could be held liable for the new franchisee's failures. A prospective Buildingstars franchisee should carefully consider this potential long-term liability and seek legal counsel to fully understand the implications before entering into a franchise agreement. It is important to negotiate the terms of release from liability during the transfer process to mitigate this risk.