Under what circumstances is Buildingstars not liable to the franchisee regarding this agreement?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 22: CONTRACTS]
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.
- 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.
XIV. INDEPENDENT CONTRACTOR/INDEMNIFICATION
BUILDINGSTARS and FRANCHISEE are independent contractors, and no partnership, fiduciary, joint venture, or employment relationship exists between them, in any respect. FRANCHISEE shall conspicuously identify itself at the premises of the Business and in all dealings with the public as the owner of the business. BUILDINGSTARS shall not be involved in the day-to-day management or control of the Business. Neither BUILDINGSTARS nor FRANCHISEE shall make any agreements or representations in the name of or on behalf of the other that their relationship is other than franchisor and franchisee. Under no circumstances shall BUILDINGSTARS be liable for any act, omission, debt, or other obligation of FRANCHISEE.
FRANCHISEE agrees that BUILDINGSTARS' action, refusal to act, approval, disapproval, consent, or refusal of consent is not, and shall not be deemed, a representation, warranty, certification or guarantee by BUILDINGSTARS about that which is acted upon or refused consent, or about any appropriateness, legality, profitability, or success related thereto.
If it is found that BUILDINGSTARS wrongfully withheld any consent pursuant to this Agreement, FRANCHISEE'S sole remedy for such failure shall be to require BUILDINGSTARS to grant such consent.
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 the franchisee. Buildingstars will not be liable for prospective profits, or special, indirect, punitive, or consequential damages arising from the agreement or the relationship with the franchisee. This means that if a franchisee believes Buildingstars' actions caused them to lose potential future earnings or incur specific types of damages, Buildingstars is not responsible for covering those losses.
Additionally, the agreement stipulates that any claims arising from the franchise relationship must be initiated within one year from when the franchisee knew or should have known about the facts leading to the claim. Failure to commence a judicial or arbitration proceeding within this timeframe bars the franchisee from pursuing the claim. Furthermore, Buildingstars' maximum aggregate liability, along with that of its officers, owners, directors, members, managers, employees, affiliates, parents, or subsidiaries, is capped at the amount the franchisee paid to Buildingstars within the 12 months immediately preceding written notice of the claim.
Buildingstars and its franchisees are considered independent contractors, meaning Buildingstars will not be liable for any act, omission, debt, or other obligation of the franchisee. This reinforces the separation between the franchisor's and franchisee's business operations and financial responsibilities. Franchisees also agree to indemnify, defend, and hold harmless Buildingstars against various damages, losses, and expenses, further protecting Buildingstars from liabilities arising from the franchisee's operations. These provisions collectively outline the limitations of Buildingstars' liability and the responsibilities of the franchisee in managing their business and legal obligations.
Finally, Buildingstars has the right to exercise its own judgment on matters related to the agreement and manual, and its actions, approvals, or refusals do not constitute warranties or guarantees regarding the appropriateness, legality, profitability, or success of the franchisee's business. If Buildingstars wrongfully withholds consent, the franchisee's sole remedy is to require Buildingstars to grant such consent, further limiting Buildingstars' liability for decisions made in its discretion.