Is Buildingstars responsible if a customer fails to pay for services?
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's 2025 Franchise Disclosure Document, Buildingstars is not responsible if a customer fails to pay for services. While Buildingstars provides billing and collection services on behalf of the franchisee, the FDD clearly states that Buildingstars is not liable for customer non-payment. The franchisee is ultimately responsible for all collection activities if a customer's payment is delinquent.
Buildingstars's role is limited to providing ongoing phone contact and reminder notices, which are mailed and faxed to delinquent customers monthly, as Buildingstars deems appropriate. Buildingstars is not obligated to hire attorneys or initiate litigation to enforce customer payments beyond these standard notifications.
This arrangement places the risk of customer non-payment squarely on the franchisee. While Buildingstars handles initial billing and reminders, the franchisee must take further action to recover unpaid amounts. This could involve direct contact with the customer, engaging collection agencies, or pursuing legal remedies, all at the franchisee's expense. Prospective franchisees should carefully consider this aspect of the franchise agreement and factor potential bad debt into their financial projections.