Can Buildingstars terminate the franchise immediately if the franchisee is convicted of a felony?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
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) failing to generate the Minimum Revenue Requirement in any month; or (g) any other act or omission which permits termination without notice and/or an opportunity to cure under applicable state law.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, Buildingstars can terminate the franchise agreement immediately if the franchisee or its owners are convicted of a felony. However, this is contingent on state law permitting such immediate termination. The felony or criminal misconduct must also materially and adversely affect the operation, maintenance, reputation, or goodwill of the franchise.
Buildingstars can also terminate the franchise immediately, if permitted by state law, for other reasons such as fraudulent activity that materially and adversely affects the franchise, abandonment of the franchise, bankruptcy or insolvency of the franchisee, giving more than two insufficient funds checks within a year, or failing to meet the Minimum Revenue Requirement in any month.
This immediate termination is without an opportunity to cure the issue, which is a significant deviation from the standard termination process that typically allows for a notice period and an opportunity to correct the deficiency. Prospective franchisees should be aware of these conditions that could lead to immediate termination, as they represent a higher risk compared to franchise agreements with standard cure periods.