Does Buildingstars have the right to approve all transfers of the franchise by the franchisee?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY |
|---|---|---|
| 1 year for Technician's Franchise Agreement; 3 years for On-Site Manager | ||
| a. Term of the franchise | Section V | Franchise Agreement and 5 years for Corporate Franchise Agreement. |
| b. Renewal or extension | Section V | 3 renewals for 1 year each for Technician Franchise Agreement, however, if a new franchise agreement is not signed, the original franchise agreement continues on a month-to-month basis; 3 renewals for 3 years each for On-Site Manager Franchise Agreement and 3 renewals of 5 years each for Corporate Franchise Agreement - all subject to terms of Section V of the Franchise Agreement. |
| c. Requirement for franchisee to renew or extend | Section V | Give notice, sign the then current franchise agreement, and pay a renewal fee. The then current franchise agreement may contain terms and conditions materially different from those in your previous franchise agreement, such as different fee requirements. Corporate Program franchises must also have been in full compliance with the Minimum Revenue Requirements. |
| d. Termination by franchisee | Section XI.B | If we breach agreement and do not cure or attempt to cure after notice |
| e. Termination by franchisor without cause | Not Applicable | Not Applicable |
| f. Termination by franchisor with cause | Sections XI.A | If you don't satisfactorily complete training or generally if you breach agreement |
| g. "Cause" defined- curable defaults | Section XI.A | You have 10 days to cure monetary defaults and failure to comply with the Conditions of Grant under the Technician Franchise Agreement and 30 days to cure all others except those listed in Sect. XI.A.3 of the Franchise Agreement. |
| h. "Cause" defined – non-curable defaults | Section XI.A.3 | Non-curable defaults: conviction of a felony, repeated defaults even if cured, failing to comply with the Minimum Revenue Requirement, bankruptcy, fraud, issuance of 2 or more insufficient funds checks and abandonment |
| I. Franchisee's obligation on termination or non-renewal | Section XIII | Complete de-identification and payment of amounts due, return materials, Manual, direct transfer of phone |
| j. Assignment of contract by franchisor | Section XIII.A | No restrictions on right to assign |
| k. "Transfer" by franchisee-definition | Section XIII.B | Consent of us |
| l. Franchisor approval of transfer by franchisee | Section XIII.B | Right to approve all transfers |
| m. Conditions for franchisor approval of transfer | Section XIII.B | Transferee qualifies, transfer fee paid, new franchise agreement signed, training of transferee, release signed |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 29–31)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, Buildingstars retains the right to approve all franchise transfers initiated by a franchisee. This is a common practice in franchising, as it allows the franchisor to maintain control over who enters the system and ensures that new franchisees meet their standards.
The FDD outlines specific conditions that Buildingstars will consider when evaluating a potential transfer. These conditions include ensuring the transferee meets Buildingstars's qualifications, that the transfer fee is paid, and that the transferee signs the current franchise agreement. Additionally, the transferee must complete the required training, and a release must be signed to finalize the transfer.
These stipulations are important for a prospective Buildingstars franchisee to understand. While they have the right to sell their franchise, Buildingstars has the final say in who takes over the business. This protects the brand and the interests of other franchisees within the Buildingstars system. Franchisees looking to transfer their franchise should ensure they find a qualified buyer who is likely to be approved by Buildingstars and is willing to meet all the necessary conditions.