Does Buildingstars require franchisees to participate directly in the operation and management of their business?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
We require you to participate directly in the operation and management of your Business.
If you are a corporation, partnership, or limited liability company, your Principal Owner is required to use his or her best efforts in the operation of the Business. "Principal Owners" means you personally if you are an individual or more than one individual, your shareholder(s) if you are a corporation, your partners if you are a partnership, or your members if you are a limited liability company. You or your Principal Owner must directly participate in the operation of your Business and must supervise your Business at all times. Principal Owners must satisfactorily complete our Initial Training Program and must agree to maintain the confidentiality of our confidential information and trade secrets. You must require all of your employees to execute a non-disclosure agreement in the form acceptable to BUILDINGSTARS relating to trade secrets and non-competition and possibly restrictive covenant and/or non-competition agreements. If you are a corporation or limited liability company, all shareholders or members and their spouses of a corporate franchise or limited liability company franchise will sign our standard form Guarantee, which is attached to the Franchise Agreement. This Guarantee provides that each individual who signs is assuming and agreeing to discharge all obligations of the "Franchisee" under the Franchise Agreement.
Source: Item 15 — OBLIGATION OF THE FRANCHISEE TO PARTICIPATE IN THE ACTUAL OPERATION OF YOUR BUSINESS (FDD pages 28–29)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, franchisees are required to participate directly in the operation and management of their business. Specifically, if the franchisee is a corporation, partnership, or limited liability company, the Principal Owner must use their best efforts in the operation of the business and must supervise the business at all times. Principal Owners are defined as the individual franchisee, shareholders of a corporation, partners in a partnership, or members of a limited liability company.
This direct participation requirement means that a Buildingstars franchisee cannot be a passive investor. They or their Principal Owner must be actively involved in the day-to-day operations and decision-making of the franchise. This ensures that the franchisee is committed to upholding Buildingstars's standards and maintaining the quality of service.
Furthermore, Principal Owners must complete Buildingstars's Initial Training Program and maintain the confidentiality of confidential information and trade secrets. Franchisees must also ensure that their employees sign a non-disclosure agreement. If the franchisee is a corporation or limited liability company, all shareholders or members and their spouses must sign a Guarantee, assuming all obligations of the Franchisee under the Franchise Agreement. These requirements highlight the importance Buildingstars places on active management, training, and protection of its business practices and proprietary information.