Is Buildingstars required to provide a cure period if the franchisee is convicted of a felony?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding anything contained herein to the contrary, if state law permits, BUILDINGSTARS shall be permitted to terminate the franchise immediately upon notice when the basis or grounds for cancellation is: (a) FRANCHISEE or its owners are convicted of a felony or any other criminal misconduct which materially and adversely affects the operation, maintenance, reputation, or goodwill of the franchise; (b) fraudulent activity which materially and adversely affects the operation, maintenance, reputation, or goodwill of the franchise; (c) abandonment of the franchise; (d) bankruptcy or insolvency of the FRANCHISEE; (e) the giving of more than two (2) no account or insufficient funds checks within a twelve-month period; or (f) any other act or omission which permits termination without notice and/or an opportunity to cure under applicable state law.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, Buildingstars is not required to provide a cure period if the franchisee or its owners are convicted of a felony. Buildingstars can terminate the franchise immediately upon notice if state law permits, provided the criminal misconduct materially and adversely affects the operation, maintenance, reputation, or goodwill of the franchise.
This immediate termination clause means that a franchisee's investment in a Buildingstars franchise could be at significant risk if they, or their owners, are convicted of a felony. The determination of whether the criminal misconduct materially and adversely affects the franchise's operation, maintenance, reputation, or goodwill is at the discretion of Buildingstars, which could lead to disputes.
In the franchise industry, it is common for franchisors to reserve the right to terminate the agreement without a cure period in cases of severe misconduct, such as criminal convictions, to protect the brand and the network. However, franchisees should be aware of the potential for immediate termination and the importance of maintaining ethical and legal compliance in their business operations.