From which sections of the Buildingstars agreement can the fees deducted by Buildingstars be found?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
FRANCHISEE further authorizes BUILDINGSTARS to deduct from payments BUILDINGSTARS collects from the Customers the fees described in Sections III and IV of this Agreement and any other amounts due to BUILDINGSTARS, any authorized insurance payments, and any out-of-pocket costs (including but not limited to attorney's fees and court costs) incurred by BUILDINGSTARS in enforcing payment of accounts by Customers or FRANCHISEE.
BUILDINGSTARS will withhold the Non-Performance Fee from the amount of billings BUILDINGSTARS collects for the FRANCHISEE.
FRANCHISEE shall pay to BUILDINGSTARS monthly (by the fifteenth (15th) day of the month following the month in which the sales were invoiced), an Administration Fee equal to five percent (5%) of the Gross Revenue from the Business throughout the term of this Agreement. BUILDINGSTARS will withhold the Administration Fee from the amount of billings BUILDINGSTARS collects for the FRANCHISEE, as more fully described in Section VI.D below. No part of the Administration Fee is refundable. FRANCHISEE is required to participate in the insurance program developed for BUILDINGSTARS and its franchisees. Although BUILDINGSTARS is obligated to pay the insurance premiums for FRANCHISEE'S coverage, FRANCHISEE is obligated to pay to BUILDINGSTARS monthly (by the fifteenth (15th) day of the month following the month in which the sales were invoiced), an Insurance Program Fee to defray the costs incurred by BUILDINGSTARS. The Insurance Program Fee is subject to change.
At the present time, the Insurance Program Fee is three and one-half percent (3 ½%) of Gross Revenue from the Business, which will provide only the following coverage for the FRANCHISEE:
- (a) Worker's Compensation;
- (b) General Liability Insurance with limits of $1,000,000 per occurrence; $2,000,000 products/completed operations aggregate, and $2,000,000 aggregate; and
- (c) Non-owned auto insurance.
BUILDINGSTARS will withhold the Insurance Program Fee and employee dishonesty coverage (described below) from the amount of billings BUILDINGSTARS collects for the FRANCHISEE, as more fully described in Section VI.D, below. No part of the Insurance Program Fee is refundable. 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 Revenue 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. FRANCHISEE shall pay to BUILDINGSTARS, monthly (by the fifteenth (15th) day of the month following the month in which the sales were invoiced), a Management Fee equal to twenty percent (20%) of Gross Revenue from the Business throughout the term of this Agreement. For example, the Management Fee for February is payable by March 15th . BUILDINGSTARS will withhold the Management Fee from the amount of billings BUILDINGSTARS collects for the FRANCHISEE, as more fully described in Sec. VI.D below. No part of the Management Fee is refundable. In order to encourage full attention to Customer needs, a Non-Performance Fee will be charged if BUILDINGSTARS' standards have not been followed resulting in a Customer complaint in which BUILDINGSTARS intervenes to resolve. If BUILDINGSTARS receives a bona fide complaint from a Customer, BUILDINGSTARS will first offer FRANCHISEE an opportunity to remedy the customer's complaint. If FRANCHISEE remedies the complaint within a twenty-four (24) hour period after BUILDINGSTARS is notified of the Customer's complaint, BUILDINGSTARS will not charge FRANCHISEE a Non-Performance Fee. However, if after the twenty-four (24) hour period the customer's complaint is not adequately remedied, BUILDINGSTARS has the right, but not the obligation to remedy the complaint and charge FRANCHISEE a Non-Performance Fee of $25 per hour per person needed to resolve the complaint, plus any other actual out of pocket expenses incurred. BUILDINGSTARS will withhold the Non-Performance Fee from the amount of billings BUILDINGSTARS collects for the FRANCHISEE.
D. Dispute Resolution Fee. In the event that the FRANCHISEE or its guarantors have not complied with the provisions in this Section on Dispute Resolutions, FRANCHISEE shall reimburse BUILDINGSTARS for all of its expenses incurred in curing the FRANCHISEE's breach (including, without limitation, BUILDINGSTARS's attorneys' fees and costs related to dismissing and responding to any improperly filed claim) and pay the BUILDINGSTARS a Dispute Resolution Fee of $50,000 ("Dispute Resolution Fee").
Source: Item 23 — RECEIPT (FDD pages 43–217)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, the fees that Buildingstars deducts from payments it collects from customers on behalf of the franchisee are detailed in Sections III and IV of the agreement. Additionally, Buildingstars may deduct any other amounts due to Buildingstars, authorized insurance payments, and any out-of-pocket costs, including attorney's fees and court costs, incurred by Buildingstars in enforcing payment of accounts by customers or the franchisee.
Specifically, Section IV outlines several fees. The Royalty Fee is 10% of Gross Revenue, the Management Fee is 20% of Gross Revenue, and a Non-Performance Fee of $25 per hour per person may be charged if Buildingstars intervenes to resolve customer complaints due to the franchisee not following Buildingstars' standards. Section III was not provided in the document excerpts.
Item 23 also mentions that Buildingstars withholds the Non-Performance Fee, Administration Fee (5% of Gross Revenue), and Insurance Program Fee (currently 3.5% of Gross Revenue) from the billings it collects for the franchisee. The Insurance Program Fee covers worker's compensation, general liability insurance ($1,000,000 per occurrence, $2,000,000 products/completed operations aggregate, and $2,000,000 aggregate), and non-owned auto insurance. A Dispute Resolution Fee of $50,000 may be charged if the franchisee fails to comply with dispute resolution provisions.