Does Buildingstars require franchisees or customers to provide collateral to secure accounts receivable?

According to Buildingstars' 2025 Franchise Disclosure Document, Buildingstars does not require collateral to secure accounts receivable. The FDD states that Buildingstars grants credit to franchisees and customers throughout the United States without requiring collateral. This policy is part of Buildingstars' accounting practices, as they generate accounts receivable in the normal course of business.

This means that Buildingstars franchisees and customers are not required to provide any assets or guarantees to secure their payment obligations. This could be seen as a benefit for franchisees and customers, as it reduces the barriers to obtaining credit and services from Buildingstars.

However, it also implies that Buildingstars bears a higher risk of potential credit losses. To account for this risk, Buildingstars maintains an allowance for credit losses, which is adjusted based on factors such as economic conditions, the size and nature of the accounts receivable balance, historical loss experience, and anticipated future losses. This allowance helps Buildingstars manage the financial impact of potential uncollectible accounts.