Is the transferee required to 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.
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 interest in the 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 consistent standards and terms across all its franchisees. By requiring a new agreement, Buildingstars can update the terms to reflect current business practices and legal requirements. This protects Buildingstars and provides a framework for the new franchisee.
This also means that the transferee will be bound by the then-current form of the Franchise Agreement, which may differ from the agreement the original franchisee signed. A prospective transferee should carefully review the current Franchise Agreement to understand their obligations and rights before completing the transfer. This includes understanding any changes in fees, operational requirements, or other key terms.