Must the transferee in a Buildingstars franchise transfer meet the standards for new franchisees?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 22: CONTRACTS]
XIII. TRANSFERABILITY OF INTEREST
A. By BUILDINGSTARS. BUILDINGSTARS is free to assign any or all of its rights and obligations under this Agreement, and upon such assignment BUILDINGSTARS shall be relieved of any of the obligations under this Agreement so assigned, and all rights and obligations shall accrue to the successor or assignee.
B. By FRANCHISEE. BUILDINGSTARS has the right to reasonably disapprove any person or entity would have actual, legal or effective control over the Business and shall have the right to approve any Transfer. Consent to a Transfer shall not be deemed a waiver of BUILDINGSTARS' right to consent to any subsequent Transfers. BUILDINGSTARS will approve a sale, Transfer or change in ownership under the following conditions:
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- Governmental Compliance. The Transfer is conducted in compliance with applicable laws and regulations and the transferee has all permits and licenses necessary to operate the Business;
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- Prior Compliance. The FRANCHISEE has performed its obligations and duties under this Agreement and FRANCHISEE is not in default under this Agreement, or any other agreement with BUILDINGSTARS;
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Payments.
The transferor has satisfied all of its monetary obligations to BUILDINGSTARS, BUILDINGSTARS' Affiliates and suppliers under this Agreement and all other agreements it has with BUILDINGSTARS;
Release.
The FRANCHISEE, including all officers, directors and shareholders (as well as all guarantors under this Agreement) must execute a general release, in the form which we approve, of any and all claims against BUILDINGSTARS, BUILDINGSTARS' Affiliates, and their respective officers, directors, employees and agents;
Requirements of Transferee.
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 be obligated to replace any customer account that have been transferred pursuant to the Transfer of Interest.
Transfer Fee.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, a transferee must meet the standards for new franchisees. Specifically, Buildingstars will approve a transfer if "[t]he 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." This requirement ensures that any new operator taking over a Buildingstars franchise has the necessary capabilities and resources to maintain the brand's standards and operational effectiveness.
In addition to meeting the standards for new franchisees, the transferee must also 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. This protects Buildingstars by ensuring the transferee is fully committed to the obligations of the franchise and legally bound by the current franchise terms.
Furthermore, in the event of the death or legal incapacity of a Buildingstars franchisee, the transfer of the franchise to heirs, personal representatives, or conservators is also contingent upon meeting Buildingstars' standards for new franchisees. The heirs must also execute the then-current form of the Franchise Agreement, and a manager must satisfactorily complete Buildingstars' Initial Training Program within thirty days. These stipulations ensure that even in unforeseen circumstances, the franchise continues to be operated by individuals who are adequately trained and meet the franchisor's criteria.