Is the Royalty Fee refundable for a Buildingstars franchise?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
IV. OTHER FEES.
- A.
Royalty Fee.
FRANCHISEE shall pay to BUILDINGSTARS, monthly (by the fifteenth (15th) day of the month following the month in which the sales were invoiced), a Royalty Fee equal to ten percent (10%) of Gross Sales from the Business throughout the term of this Agreement.
For example, the Royalty Fee for February is payable by March 15th.
BUILDINGSTARS will withhold the Royalty Fee from the amount of billings BUILDINGSTARS collects for the FRANCHISEE, as more fully described in Sec.
VI.D. below.
No part of the Royalty Fee is refundable.
Notwithstanding the foregoing, FRANCHISEE shall pay a Royalty Fee of twenty percent (20%) instead of ten percent (10%) on the Gross Sales attributable to Specialty Work.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, the Royalty Fee is not refundable. Buildingstars franchisees must pay a monthly Royalty Fee, typically 10% of Gross Sales, by the 15th of the following month. For example, the Royalty Fee for February is due by March 15th. However, the Royalty Fee can increase to 20% or 30% of Gross Sales for Specialty Work depending on the franchise program. Buildingstars withholds the Royalty Fee from the billings it collects on behalf of the franchisee.
This non-refundable policy means that once a Buildingstars franchisee pays the Royalty Fee, they cannot get it back under any circumstances. This is a standard practice in many franchise systems, as the royalty fee compensates the franchisor for ongoing support, brand usage, and other services provided throughout the franchise term.
Prospective Buildingstars franchisees should carefully consider this non-refundable aspect of the Royalty Fee and factor it into their financial projections. Understanding the terms and conditions associated with fees is crucial for making informed decisions about investing in a Buildingstars franchise.