Can Buildingstars terminate the franchise immediately if the franchisee gives more than two insufficient funds checks within a 12-month period?
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's 2025 Franchise Disclosure Document, Buildingstars can terminate the franchise agreement immediately if a franchisee gives more than two insufficient funds checks within a 12-month period, but this is contingent on state law permitting such immediate termination.
This immediate termination is listed under conditions where Buildingstars can terminate the franchise without offering an opportunity to cure the issue. Other conditions that allow for immediate termination, if state law permits, include a franchisee or its owners being convicted of a felony, fraudulent activity that adversely affects the franchise, abandonment of the franchise, or bankruptcy or insolvency of the franchisee.
This clause highlights the importance of understanding the specific laws in the franchisee's state, as they will ultimately determine whether Buildingstars can exercise its right to immediate termination in these situations. A prospective franchisee should consult with a legal professional to understand their rights and obligations under the franchise agreement and applicable state laws.