Is Buildingstars required to offer new customer accounts to franchisees?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
ILDINGSTARS' obligations to provide customer accounts as provided for under Sections III and VI.E. shall be deemed satisfied.
Notwithstanding anything herein to the contrary, if FRANCHISEE is converting its franchise from a Technician Program franchise, any customer account which FRANCHISEE continues to service from the Technician Program will be applied to fulfill the Monthly Contract Revenue which FRANCHISEE has chosen.
F. New Customer Accounts. BUILDINGSTARS may offer new customer accounts or increase the existing customer accounts to FRANCHISEE if FRANCHISEE is in full compliance with the terms of this Agreement. FRANCHISEE acknowledges that BUILDINGSTARS has no obligation to offer new customer accounts or increase an existing customer account. If BUILDINGSTARS offers FRANCHISEE a new customer account, FRANCHISEE must follow the procedures set forth in the Confidential Operations Manual for rejecting or accepting the customer account and pay an Account Sales Fee as set forth herein. FRANCHISEE is under no obligation to accept any customer account.
FRANCHISEE may request new customer accounts and pay the Account Sales Fee which is described in Section IV.C above. BUILDINGSTARS will use its best efforts to provide the new customer accounts within ninety (90) days of the submission of the request and payment by FRANCHISEE as provided above and BUILDINGSTARS will have additional thirty (30) day periods after the initial ninety (90) days to provide the new customer accounts for each additional $1,000 of new customer accounts ("New Customer Accounts Offering Period" or "NCA Offering Period").
For Example:
| Monthly Contract Revenue | NCA Offering Period (begins at the submission of Request for New Customer Accounts) |
|---|---|
| $1,000 | 90 days |
| $2,000 | 120 days |
| $3,000 | 150 days |
| $4,000 | 180 days |
For all new customer accounts, FRANCHISEE has a thirty (30) day trial period. Within said thirty (30) day period, if FRANCHISEE does not want to accept the new customer account, FRANCHISEE must do the following: (i) give BUILDINGSTARS notice in writing of its intent to cancel the account no later than the 30th day after FRANCHISEE begins servicing the new customer account; and (ii) continue to service the new customer account until it can be transferred to another franchisee to the satisfaction of BUILDINGSTARS and new customer. Upon the successful transfer of the new customer account to another franchisee, BUILDINGSTARS will credit FRANCHISEE'S next Monthly Revenue Statement in the amount of the Account Sales Fee which FRANCHISEE has paid for said new customer account and BUILDINGSTARS will cancel the Promissory Note for said Account Sales Fee.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, Buildingstars is generally not obligated to offer new customer accounts to franchisees. However, there are specific circumstances where Buildingstars will offer new customer accounts.
For initial customer accounts, Buildingstars is obligated to offer new customer accounts totaling at least $2,000. The period of time in which Buildingstars will offer the initial customer accounts is called the "Initial Customer Accounts Offering Period" or "ICA Offering Period," beginning with the start of operations. The ICA Offering Period will be ninety (90) days for the first $1,000 in Monthly Contract Revenue and an additional 30 day period for each additional $1,000 in Monthly Contract Revenue. Once Buildingstars has offered the franchisee customer accounts in the total amount requested by the franchisee which corresponds to the Initial Franchise Fee paid by the franchisee, Buildingstars' obligations to provide initial customer accounts are satisfied, regardless of whether the franchisee accepts these accounts.
Buildingstars will also offer a new customer account or increase an existing customer account with Monthly Contract Revenue of at least an equal dollar amount to the lost account's Monthly Contract Revenue if a customer ceases to do business, becomes insolvent or bankrupt, or moves outside of the territory within the first six months of service.
The franchisee may also request new customer accounts and pay the Account Sales Fee. Buildingstars will use its best efforts to provide the new customer accounts within ninety (90) days of the submission of the request and payment by the franchisee and will have additional thirty (30) day periods after the initial ninety (90) days to provide the new customer accounts for each additional $1,000 of new customer accounts.