Must the transferee execute a new Franchise Agreement with Buildingstars?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
The transferee meets the established standards for new franchisees, is of good moral character, has a good credit rating, sufficient financial resources to operate the business and competent qualifications.
The transferee must execute a new Franchise Agreement with the standard terms and conditions then being offered in the FRANCHISEE'S state by BUILDINGSTARS and the owners must execute a personal guarantee.
Notwithstanding anything herein to the contrary, under no circumstances will BUILDINGSTARS will be obligated to replace any customer account that have been transferred pursuant to the Transfer of Interest.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, if a franchisee transfers their franchise, the transferee is required to execute a new Franchise Agreement. Specifically, the transferee must agree to the standard terms and conditions that Buildingstars is offering in the franchisee's state at the time of the transfer. Additionally, the owners of the transferee entity must execute a personal guarantee.
This requirement ensures that Buildingstars maintains a consistent set of standards and legal agreements with all of its franchisees. By requiring a new agreement, Buildingstars can update the terms and conditions to reflect current business practices and legal requirements. This protects Buildingstars and ensures all franchisees operate under the same rules.
For a prospective Buildingstars franchisee, this means that if they plan to sell their franchise in the future, the potential buyer will need to meet Buildingstars' standards for new franchisees and agree to the then-current Franchise Agreement. This could impact the sale, as the buyer's willingness to accept the new agreement will be a factor in the transaction. The franchisee should also be aware that Buildingstars is not obligated to replace any customer accounts that have been transferred.