Under what conditions will Buildingstars replace a lost new customer account for a franchisee?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
- J. Replacement of Customer Accounts. So long as FRANCHISEE is in compliance with the Franchise Agreement, BUILDINGSTARS will replace any initial customer account or new customer account upon the occurrence of any of the following events, if any such event occurs within the first six (6) months from the date FRANCHISEE began servicing the lost Customer:
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- The Customer ceases to do business or is insolvent or bankrupt; or
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- The Customer moves outside of the Territory.
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In such event, BUILDINGSTARS will offer FRANCHISEE a new customer account or increase an existing customer account with Monthly Contract Revenue of at least an equal dollar amount to the lost account's Monthly Contract Revenue. FRANCHISEE will not be entitled to any refund or reduction in Account Sales Fees already paid. In addition, FRANCHISEE will be required to continue to pay on the outstanding Account Sales Fee due in accordance with the Promissory Note.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, Buildingstars will replace a lost initial or new customer account if the franchisee is in compliance with the Franchise Agreement and if either of the following events occurs within the first six months from the date the franchisee began servicing the customer: the customer ceases to do business, becomes insolvent or bankrupt, or the customer moves outside of the territory.
In the event that Buildingstars replaces the lost account, they will offer the franchisee a new customer account or increase an existing customer account with Monthly Contract Revenue of at least an equal dollar amount to the lost account's Monthly Contract Revenue.
It is important to note that the franchisee will not be entitled to any refund or reduction in Account Sales Fees already paid. The franchisee will also be required to continue to pay on the outstanding Account Sales Fee due in accordance with the Promissory Note. This means that even though the customer account is lost and replaced, the franchisee's financial obligations related to the initial sale of that account remain in effect.