Can Buildingstars terminate a franchisee's agreement if they fail to meet the Minimum Revenue Requirement?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
d fully paid license to use and sublicense the use of the ideas, concepts, techniques or materials.
- H. Financial Records and Reports. FRANCHISEE agrees to furnish to BUILDINGSTARS financial reports as shall be requested by BUILDINGSTARS from time to time pursuant to or in connection with this Agreement or as specified in the Confidential Operations Manual. FRANCHISEE shall establish a business checking account and will continue to maintain a business checking account throughout the term of this Agreement.
- I. Minimum Revenue Requirement. Commencing as
Source: Item 12 — TERRITORY (FDD pages 26–27)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, Buildingstars can terminate the Franchise Agreement if a franchisee fails to meet the Minimum Revenue Requirement. Starting in the 13th month of operation, a Buildingstars franchisee must generate at least $20,000 in Monthly Contract Revenue each month. This requirement continues for the remainder of the agreement's term.
If a franchisee fails to meet this Minimum Revenue Requirement in any month, Buildingstars has the right to modify the franchisee's area or terminate the agreement. Importantly, the franchisee is not granted an opportunity to cure this deficiency. This means Buildingstars can take immediate action without giving the franchisee a chance to correct the revenue shortfall.
This lack of a cure period is a significant point for prospective franchisees. Typically, franchise agreements allow a period to correct deficiencies before termination. The Buildingstars agreement is stricter in this regard, as failure to meet the minimum revenue can lead to immediate modification of the area or termination of the agreement. This provision underscores the importance of carefully assessing the market potential and the franchisee's ability to meet the stated revenue targets before investing in a Buildingstars franchise.