Under the Buildingstars franchise agreement, is Buildingstars liable to the franchisee for prospective profits or special, indirect, punitive, or consequential damages?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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.
- B. THE PARTIES WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THEM RELATING TO OR ARISING OUT OF THIS AGREEMENT OR THE RELATIONSHIP OF THE PARTIES.
- C. ANY DISAGREEMENT BETWEEN FRANCHISEE AND BUILDINGSTARS (AND ITS AFFILIATES AND OWNERS) WILL BE CONSIDERED UNIQUE AS TO ITS FACTS AND MUST NOT BE BROUGHT AS A CLASS ACTION AND FRANCHISEE WAIVES ANY RIGHT TO PROCEED AGAINST BUILDINGSTARS (AND ITS AFFILIATES, STOCKHOLDERS, MEMBERS, MANAGERS, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, SUCESSORS AND ASSIGNS) BY WAY OF CLASS ACTION, OR BY WAY OF A MULTI-PLAINTIFF, CONSOLIDATED OR COLLECTIVE ACTION.
- 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.
Source: Item 23 — RECEIPT (FDD pages 43–217)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, Buildingstars limits its liability to franchisees. Specifically, Buildingstars will not be liable to the franchisee for prospective profits, or special, indirect, punitive, or consequential damages arising from any conduct related to the franchise agreement or the relationship between Buildingstars and the franchisee. This means a franchisee cannot recover these types of damages from Buildingstars, even if Buildingstars's actions cause financial harm.
This limitation of liability is a significant factor for prospective franchisees to consider. It means that if a franchisee believes they have suffered losses due to Buildingstars's actions, their ability to recover damages is restricted. They are barred from claiming lost future profits or other indirect losses. This type of clause is relatively common in franchise agreements, as franchisors seek to manage their financial risks.
Furthermore, the franchise agreement includes a waiver of trial by jury for any disputes arising from the agreement or the relationship between the parties. Additionally, any disagreement between the franchisee and Buildingstars must be considered unique and cannot be brought as a class action. The franchisee also waives any right to proceed against Buildingstars by way of class action, or by way of a multi-plaintiff, consolidated or collective action. Finally, any claims arising out of or relating to the agreement or Buildingstars's relationship with the franchisee must be commenced within one year from the date the franchisee knew or should have known of the facts giving rise to the claim.
Given these limitations, prospective Buildingstars franchisees should carefully evaluate the potential risks and benefits of the franchise opportunity. They should consult with legal and financial advisors to fully understand the implications of these clauses before signing the franchise agreement. Understanding these limitations is crucial for making an informed decision about investing in a Buildingstars franchise.