Does state law affect Buildingstars' ability to terminate the franchise agreement?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
- (6) Fails to properly service Customers in accordance with BUILDINGSTARS' standards and within the spirit and intent of this Agreement. (By way of illustration and not limitation, a failure to properly service Customers will occur if at least three customer complaints are made regarding the services rendered by the Business within any consecutive ninety day period because of dissatisfaction with services provided by the Business.)
Subject to applicable law and except as otherwise provided in this Agreement, BUILDINGSTARS will give the FRANCHISEE at least ninety (90) days prior written notice of termination, [unless a longer period of time is required or shorter period of time is permitted by applicable state law]. The notice shall state the reason(s) for termination and shall provide that the FRANCHISEE has
thirty (30) days from the date of said notice to correct any claimed deficiency. If the deficiency is corrected within thirty (30) days, the notice shall be void. If the deficiency is not corrected within said thirty (30) day period, BUILDINGSTARS may terminate this Agreement after ninety (90) days from the date of original default notice.
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- 10 Day Opportunity to Cure BUILDINGSTARS may also terminate this Agreement for nonpayment of sums due to BUILDINGSTARS or BUILDINGSTARS' Affiliates or suppliers; or failure of FRANCHISEE to open the Business in accordance with the time periods specified in this Agreement. If termination is based on the foregoing, the FRANCHISEE shall be entitled to written notice of default, but BUILDINGSTARS shall [if permitted by applicable law] only be required to grant FRANCHISEE ten (10) days to remedy such default. If the deficiency is not corrected within said ten (10) day period, BUILDINGSTARS may terminate this Agreement after ninety (90) days from the original default notice.
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- Without Opportunity to Cure. Notwithstanding anything contained herein to the contrary, if state law permits, BUILDINGSTARS shall be permitted to terminate the franchise immediately upon notice when the basis or grounds for cancellation is: (a) FRANCHISEE or its owners are convicted of a felony or any other criminal misconduct which materially and adversely affects the operation, maintenance, reputation, or goodwill of the franchise; (b) fraudulent activity which materially and adversely affects the operation, maintenance, reputation, or goodwill of the franchise; (c) abandonment of the franchise; (d) bankruptcy or insolvency of the FRANCHISEE; (e) the giving of more than two (2) no account or insufficient funds checks within a twelve-month period; or (f) any other act or omission which permits termination without notice and/or an opportunity to cure under applicable state law.
- B. Termination by FRANCHISEE. FRANCHISEE must notify BUILDINGSTARS in writing of any failure of BUILDINGSTARS to perform any of BUILDINGSTARS' obligations pursuant to this Agreement. FRANCHISEE may terminate this Agreement if BUILDINGSTARS shall materially default in performance of any terms and conditions in this Agreement, after giving BUILDINGSTARS written notice within thirty (30) days thereof, and if the default has not been corrected within sixty (60) days thereafter.
- C. Consequences of Termination.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, state laws can indeed impact Buildingstars's ability to terminate a franchise agreement. Generally, Buildingstars will provide a franchisee with at least 90 days' prior written notice of termination. However, this is subject to applicable law, meaning that if a state law requires a longer or permits a shorter notice period, the state law will take precedence. The notice must include the reasons for termination and allow the franchisee 30 days to correct any deficiencies. If the franchisee fixes the issue within this period, the termination notice becomes void.
There are specific instances where Buildingstars may terminate the agreement with only ten days' notice to remedy a default, such as nonpayment of dues or failure to open the business as scheduled, but this is also contingent on what applicable law permits. In certain situations, Buildingstars can terminate the franchise immediately upon notice if state law allows, such as in cases of a felony conviction, fraudulent activity, abandonment of the franchise, bankruptcy, issuing more than two insufficient funds checks within a year, failing to meet the Minimum Revenue Requirement in any month, or any other act that permits termination without notice under state law.
Furthermore, if any existing law or regulation limits Buildingstars's rights of rescission or termination or requires longer notice periods, the franchise agreement will be amended to comply with those minimum requirements. Buildingstars retains the right to contest the validity of such laws or regulations. If a state regulator mandates an amendment to the agreement, it will be included as a State Law Addendum. Therefore, prospective franchisees should be aware that the specific terms of termination can vary based on the state in which they operate, and they should consult with legal counsel to understand their rights and obligations under local laws.