Who is responsible for reimbursing Buildingstars' costs and expenses if Buildingstars enforces the Guaranty and Assumption of Obligations?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
If BUILDINGSTARS or any of the Affiliates are required to enforce this Guaranty and Assumption of Obligations in any judicial proceeding or appeal thereof, the GUARANTORS shall reimburse BUILDINGSTARS and Affiliates for its costs and expenses, including, but not limited to, reasonable accountants', attorneys', attorney assistants', and expert witness fees, costs of investigation and proof of facts, court costs, other litigation expenses and travel and living expenses, whether incurred prior to, in preparation for or in contemplation of the filing of any written demand, claim, action, hearing or proceeding to enforce this Guaranty.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, if Buildingstars or its affiliates must enforce the Guaranty and Assumption of Obligations through a judicial proceeding or appeal, the Guarantors are responsible for reimbursing Buildingstars and its affiliates for all associated costs and expenses.
These reimbursable costs include, but are not limited to, reasonable fees for accountants, attorneys, attorney assistants, and expert witnesses. Additionally, the Guarantors must cover costs related to the investigation and proof of facts, court costs, other litigation expenses, and travel and living expenses. This reimbursement obligation applies whether these costs are incurred before, during the preparation for, or in anticipation of filing any written demand, claim, action, hearing, or proceeding to enforce the Guaranty.
This means that if a Buildingstars franchisee defaults on their obligations and Buildingstars has to take legal action against the Guarantors to enforce the guaranty, the Guarantors will be responsible for covering Buildingstars' legal and related expenses. This could potentially be a significant financial burden for the Guarantors, depending on the complexity and duration of the legal proceedings.