Under what conditions is a Buildingstars franchisee required to pay a Customer Development Fee to Buildingstars after the termination, expiration, or transfer of the franchise agreement?

According to Buildingstars's 2025 Franchise Disclosure Document, a franchisee may be required to pay a Customer Development Fee after the termination, expiration, or transfer of the franchise agreement. Specifically, if within one year after the termination, expiration, or transfer, the franchisee (or any employee or affiliate of the franchisee) performs services for a Buildingstars customer that are similar to those performed under the franchise agreement, but outside of the agreement, the franchisee must pay Buildingstars a fee.

The Customer Development Fee is calculated as three times the monthly amount agreed to be paid to the franchisee, their employee, or affiliate for such services. This condition is in place to protect Buildingstars's customer relationships and prevent franchisees from leveraging their access to customers gained during the franchise term to compete with Buildingstars shortly after the agreement ends.

This provision serves as a restrictive covenant, preventing a former Buildingstars franchisee from directly competing for a defined period. Franchisees should carefully consider this obligation, as it could significantly impact their ability to operate a similar business independently after leaving the Buildingstars system. It is important to fully understand the scope of 'similar services' and how Buildingstars determines the 'monthly amount agreed to be paid' to avoid potential disputes.