Under what conditions will Buildingstars charge a Non-Performance Fee to a franchisee?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
the sales were invoiced), a Management Fee equal to ten percent (10%) of Gross Sales from the Business throughout the term of this Agreement. For example, the Management Fee for February is payable by March 15th. BUILDINGSTARS will withhold the Management Fee from the amount of billings BUILDINGSTARS collects for the FRANCHISEE, as more fully described in Sec. VI.D. below. No part of the Management Fee is refundable.
- C. Non-Performance Fee. In order to encourage full attention to Customer needs, a Non-Performance Fee will be charged if BUILDINGSTARS' standards have not been followed resulting in a Customer complaint in which BUILDINGSTARS intervenes to resolve. If BUILDINGSTARS receives a bona fide complaint from a Customer, BUILDINGSTARS will first offer FRANCHISEE an opportunity to remedy the Customer's complaint. If FRANCHISEE remedies the complaint within a twenty-four (24) hour period after BUILDINGSTARS is notified of the Customer's complaint, BUILDINGSTARS will not charge FRANCHISEE a Non-Performance Fee. However, if after the twenty-four (24)
Source: Item 23 — RECEIPT (FDD pages 43–217)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, a Non-Performance Fee may be charged to a franchisee under specific circumstances related to customer complaints and the franchisee's response to those complaints. Buildingstars aims to ensure that franchisees fully address customer needs and adhere to the company's standards.
Specifically, Buildingstars will charge a Non-Performance Fee if their standards are not followed, resulting in a customer complaint that requires Buildingstars to intervene. However, Buildingstars first offers the franchisee an opportunity to resolve the complaint within 24 hours of notification. If the franchisee successfully remedies the complaint within this timeframe, no Non-Performance Fee is charged.
If the customer's complaint is not adequately resolved after the 24-hour period, Buildingstars has the right, but not the obligation, to step in and fix the issue themselves. In such cases, the franchisee will be charged a Non-Performance Fee of $25 per hour per person needed to resolve the complaint, in addition to any other out-of-pocket expenses incurred by Buildingstars. This fee will be withheld from the amount Buildingstars collects on behalf of the franchisee.
This policy encourages Buildingstars franchisees to promptly and effectively address customer concerns. The 24-hour window provides an opportunity for franchisees to maintain control over customer relationships and avoid incurring additional fees. However, it also places a financial burden on franchisees who fail to meet customer expectations and require intervention from Buildingstars.