What right does Buildingstars retain regarding a Buildingstars franchisee's customer accounts?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
- G.
Inspections of Customer Premises.
BUILDINGSTARS may make periodic quality control and Customer relations visits to each customer account location of FRANCHISEE.
- H.
Discontinue Right to Customer Account.
BUILDINGSTARS retains the right to discontinue allowing FRANCHISEE to service a Customer Account at any time if BUILDINGSTARS, in its sole discretion, determines that FRANCHISEE is not adequately servicing the customer account.
Factors which BUILDINGSTARS considers include, but are not limited to the following: Customer complaints, unresponsiveness to Customer or BUILDINGSTARS, allegations by Customer of theft or breakage, lateness or failure to complete the job in a professional manner.
In such event, BUILDINGSTARS does not have any obligation to replace said Customer Account with another.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, Buildingstars retains specific rights regarding a franchisee's customer accounts. Buildingstars may conduct periodic quality control and customer relations visits to the franchisee's customer locations. More significantly, Buildingstars can discontinue a franchisee's right to service a customer account if Buildingstars, in its sole discretion, determines that the franchisee is not adequately servicing the account. Factors considered include customer complaints, unresponsiveness, allegations of theft or breakage, and failure to complete jobs professionally. If Buildingstars exercises this right, it is not obligated to replace the customer account.
This provision has important implications for a prospective Buildingstars franchisee. It means that Buildingstars maintains control over the customer relationship and can remove accounts from a franchisee if service quality is deemed inadequate. This creates a risk for the franchisee, as loss of accounts directly impacts revenue. The franchisee must adhere to Buildingstars's standards and address any customer issues promptly to avoid losing the account.
In the event of termination or expiration of the Franchise Agreement, the franchisee must immediately cease providing services to all customers and forfeits all rights to the customer accounts. Buildingstars has the right to either service the accounts themselves or assign the servicing of the accounts to others. The franchisee cannot terminate a written contract until proper notice has been given to Buildingstars prior to termination.
Buildingstars also subcontracts with its affiliate, Buildingstars Operations, Inc., to provide services related to customer accounts, including billing and collection. Buildingstars reserves the right to modify, extend, or discontinue this subcontract relationship at any time. This means that the franchisee's billing and collection processes are subject to change at Buildingstars's discretion, which could impact the franchisee's administrative tasks and revenue management.