Is Buildingstars responsible if a customer fails to pay for services rendered?
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 provides franchisees with billing and collection services but is not responsible if a customer fails to pay for services. Buildingstars is also not required to commence any further action beyond the services outlined in the agreement if a customer does not pay.
Specifically, Buildingstars is authorized to bill customers, accept payments, collect accounts receivable, and maintain revenue records on behalf of the franchisee. Buildingstars will provide customer invoices, envelopes, and postage, as well as ongoing phone contact and reminder notices to delinquent customers on a monthly basis. Buildingstars will also provide a Monthly Revenue Statement to the franchisee.
However, the franchisee is ultimately responsible for all collection activities if a customer is delinquent in payment. This means that the franchisee will need to pursue further action to recover any unpaid amounts. Prospective franchisees should carefully consider the potential impact of unpaid customer invoices on their business's cash flow and profitability. It is important to have a plan in place for managing delinquent accounts and pursuing collections, as Buildingstars will not be responsible for these activities.