Is Buildingstars required to terminate the franchise agreement if a franchisee fails to operate the business for three consecutive days?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
e an undue burden upon FRANCHISEE'S ability to earn a livelihood.
The terms of this Section X are assignable by BUILDINGSTARS and shall inure to the benefit of BUILDINGSTARS, as well as its successors and assigns. In the event of any assignment, sale, merger or change in ownership or structure of BUILDINGSTARS, the resulting entity shall step into the place of BUILDINGSTARS, without any additional consent of or notice to FRANCHISEE, as if the term BUILDINGSTARS were defined in this Agreement to include such entity
XI. DEFAULT AND TERMINATION
A. Termination by BUILDINGSTARS.
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- 30 Day Opportunity to Cure BUILDINGSTARS may at its option, and without prejudice to any other rights or remedies provided for in this Agreement or at law or in equity, terminate this Agreement for "good cause". (Provided that state law permits BUILDINGSTARS to terminate earlier if the "good cause" constitutes a default which is not curable). Without limitation as to other situations, good cause for termination also exists if FRANCHISEE or any guarantor of this Agreement:
- (1) Does not perform any and all of the lawful terms, conditions, and obligations of this Agreement, or the Confidential Operations Manual; or
- (2) Commits any other act which constitutes good cause under applicable state law or court decisions; or
- (3) Engages in any illegal, fraudulent, unfair or deceptive business practice, which, in the opinion of BUILDINGSTARS, adversely affects the operation, maintenance, or goodwill of the franchise; or
- (4) Fails to operate the Business for a period of three (3) consecutive days without justifiable cause; or
- (5) Diverts or collects any fees from Customers in violation of Section VI.D, above which provide that Customer billings and collections are to be done by BUILDINGSTARS; or
- (6) Fails to properly service Customers in accordance with BUILDINGSTARS' stand
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, Buildingstars may terminate the franchise agreement if a franchisee fails to operate the business for three consecutive days without justifiable cause. This is considered "good cause" for termination. However, Buildingstars is not automatically required to terminate the agreement in this situation; they may choose to do so at their option.
Before Buildingstars can terminate the agreement for this reason, they must provide the franchisee with a 30-day written notice to correct the deficiency, unless state law permits Buildingstars to terminate earlier if the "good cause" constitutes a default which is not curable. If the franchisee corrects the issue within 30 days, the termination notice is voided. If the franchisee does not resolve the issue within the 30-day period, Buildingstars can proceed with terminating the agreement, with the termination becoming effective no less than ninety (90) days after the original notice.
This clause provides Buildingstars with a degree of flexibility in addressing operational issues. It also gives the franchisee an opportunity to rectify the situation and maintain the franchise. However, the franchisee should be aware that repeated instances of failing to operate the business, even if cured, could potentially impact their ability to renew the franchise agreement at the end of its term.