Is Buildingstars required to commence any further action if the customer doesn't pay?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
- D. Management Services BUILDINGSTARS will provide FRANCHISEE with billing and collection services on its behalf. However, BUILDINGSTARS is not responsible if the Customer fails to pay nor is BUILDINGSTARS required to commence any further action other than as set forth herein if they do not pay. FRANCHISEE is responsible for any and all collection activities if a Customer is delinquent in payment.
- a. Authorization to BUILDINGSTARS. FRANCHISEE hereby authorizes BUILDINGSTARS to bill each Customer on a scheduled basis, accept payments from customer accounts, collect accounts receivable, and maintain revenue records. BUILDINGSTARS will provide Customer imprinted invoices, envelopes and postage. In addition, BUILDINGSTARS will provide ongoing phone contact and reminder notices, both mailed and faxed to delinquent Customers on a monthly basis. Once a month BUILDINGSTARS will provide FRANCHISEE a Monthly Revenue Statement. FRANCHISEE hereby authorizes BUILDINGSTARS to collect cash and other forms of payment from accounts to which FRANCHISEE has rendered services or products, endorse FRANCHISEE'S name on and deposit checks, sign its name on liens, and take any other action necessary to carry out the terms of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, Buildingstars is not responsible if a customer fails to pay, nor is it required to commence any further action beyond what is outlined in the agreement. The agreement specifies that Buildingstars will provide billing and collection services, including sending invoices, envelopes, postage, ongoing phone contact, and reminder notices to delinquent customers monthly. However, the franchisee is ultimately responsible for all collection activities if a customer's payment is delinquent.
Buildingstars is authorized to bill customers, accept payments, collect receivables, and maintain revenue records on behalf of the franchisee. They can also deduct fees, insurance payments, and out-of-pocket costs (including attorney's fees and court costs) from customer payments to cover expenses incurred in enforcing payment. Despite these authorizations, the franchisee is responsible for covering all reasonable attorney's fees, court costs, and other expenses related to collecting from customers.
In practical terms, this means that while Buildingstars provides initial billing and collection services, the onus is on the franchisee to pursue further collection efforts if a customer does not pay. This could involve hiring attorneys or initiating legal action, with the franchisee bearing the associated costs. A prospective franchisee should carefully consider these responsibilities and potential costs when evaluating the Buildingstars franchise opportunity.