Under what circumstances is Buildingstars not liable to the franchisee for damages?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 22: CONTRACTS]
BUILDINGSTARS is the only entity obligated to FRANCHISEE hereunder. FRANCHISEE may not look to any of BUILDINGSTARS' Affiliates or related companies, other business entities or individuals for performance of this Agreement.
XX. LIMITATION OF LEGAL ACTIONS
- A. IN NO EVENT WILL BUILDINGSTARS BE LIABLE TO FRANCHISEE FOR PROSPECTIVE PROFITS OR SPECIAL, INDIRECT, PUNITIVE OR CONSEQUENTIAL DAMAGES FOR ANY CONDUCT ARISING OUT OF THIS AGREEMENT OR BUILDINGSTARS RELATIONSHIP WITH FRANCHISEE.
- B. THE PARTIES WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THEM RELATING TO OR ARISING OUT OF THIS AGREEMENT OR THE RELATIONSHIP OF THE PARTIES.
- C. ANY DISAGREEMENT BETWEEN FRANCHISEE AND BUILDINGSTARS (AND ITS AFFILIATES AND OWNERS) WILL BE CONSIDERED UNIQUE AS TO ITS FACTS AND MUST NOT BE BROUGHT AS A CLASS ACTION AND FRANCHISEE WAIVES ANY RIGHT TO PROCEED AGAINST BUILDINGSTARS (AND ITS AFFILIATES,
STOCKHOLDERS, MEMBERS, MANAGERS, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS) BY WAY OF CLASS ACTION, OR BY WAY OF A MULTI-PLAINTIFF, CONSOLIDATED OR COLLECTIVE ACTION.
- D. FRANCHISEE WILL BE BARRED FROM BRINGING ANY AND ALL CLAIMS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR BUILDINGSTARS' RELATIONSHIP WITH FRANCHISEE, UNLESS A JUDICIAL OR ARBITRATION PROCEEDING IS COMMENCED WITHIN ONE (1) YEAR FROM THE DATE ON WHICH FRANCHISEE KNEW OR SHOULD HAVE KNOWN OF THE FACTS GIVING RISE TO THAT CLAIM.
- E. BUILDINGSTARS MAXIMUM AGGREGATE LIABILITY AND THE MAXIMUM AGGREGATE LIABILITY OF ANY OF BUILDINGSTARS'S OFFICERS, OWNERS, DIRECTORS, MEMBERS, MANAGERS, EMPLOYEES, AFFILIATES, PARENTS OR SUBSIDIARIES RELATED TO ANY AND ALL CLAIMS RELATING TO OR ARISING FROM THIS AGREEMENT OR THE FRANCHISE RELATIONSHIP SET FORTH IN THIS AGREEMENT SHALL BE COLLECTIVELY LIMITED TO THE AMOUNT FRANCHISEE PAID TO BUILDINGSTARS WITHIN THE PRIOR 12 MONTHS IMMEDIATELY BEFORE WRITTEN NOTICE OF ANY PROPER CLAIM IS RECEIVED BY BUILDINGSTARS.
THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date set forth below their names.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, there are several circumstances under which Buildingstars limits its liability to franchisees. Buildingstars will not be liable for prospective profits, or special, indirect, punitive, or consequential damages resulting from any conduct related to the franchise agreement or the relationship with the franchisee. This means a franchisee cannot sue Buildingstars for lost future earnings or for certain types of damages beyond direct costs.
Furthermore, the agreement stipulates that Buildingstars's maximum aggregate liability, along with that of its officers, owners, directors, members, managers, employees, affiliates, parents, or subsidiaries, is limited to the amount the franchisee paid to Buildingstars within the 12 months immediately before Buildingstars received written notice of a claim. This places a cap on the total amount a franchisee can recover from Buildingstars, regardless of the extent of the damages claimed.
Additionally, Buildingstars and the franchisee operate as independent contractors, meaning Buildingstars will not be liable for any act, omission, debt, or other obligation of the franchisee. This provision aims to protect Buildingstars from liabilities arising from the franchisee's business operations and conduct. Franchisees should be aware of these limitations on liability, as they can significantly impact their ability to recover damages in case of disputes or issues with the franchise.