Under what condition can Buildingstars withhold the monthly note payment from the amount of billings it collects for the franchisee?

According to Buildingstars's 2025 Franchise Disclosure Document, Buildingstars may withhold monthly Promissory Note payments from the amount of billings it collects for the franchisee. This applies whether the franchisee requests new customer accounts or Buildingstars offers new customer accounts to the franchisee. The specifics of this withholding are further detailed in Section VI.D of the Franchise Agreement.

This means that Buildingstars has the right to deduct the franchisee's monthly payments for the Account Sales Fee directly from the revenue Buildingstars collects on behalf of the franchisee. The Account Sales Fee is a percentage of the Monthly Contract Revenue generated from new customer accounts, and it is financed through a Promissory Note. This arrangement ensures that Buildingstars can secure payment for the accounts sold to the franchisee.

It is important for prospective Buildingstars franchisees to carefully review Section VI.D of the Franchise Agreement to fully understand the procedures and conditions under which Buildingstars may withhold these payments. Franchisees should also be aware that a default on the Promissory Note is considered a default under the entire Franchise Agreement, which could lead to further penalties or termination of the franchise.