Can Buildingstars withhold consent to a Buildingstars franchise transfer if the purchase price is not economically feasible?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
Although BUILDINGSTARS will not be required to determine the value of business upon a Transfer, if in BUILDINGSTARS' reasonable judgment, the purchase price or terms of the sale are not economically feasible to the proposed assignee, BUILDINGSTARS can withhold its consent to such an assignment or Transfer.
Further, BUILDINGSTARS may, in good faith, notify FRANCHISEE, stating the reasons that BUILDINGSTARS has elected to withhold approval of the proposed Transfer.
Notwithstanding the foregoing, BUILDINGSTARS' approval of the Transfer shall not be deemed to imply or warrant that the purchase price or terms of sale are economically feasible, and BUILDINGSTARS hereby disclaims any responsibility for making any such determination.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, Buildingstars can withhold consent to a franchise transfer if the purchase price or terms of the sale are not economically feasible to the proposed assignee, in Buildingstars' reasonable judgment. However, Buildingstars is not required to determine the value of the business during a transfer. Buildingstars may notify the franchisee in good faith, stating the reasons for withholding approval of the proposed transfer.
This means that if Buildingstars believes the financial terms of a proposed sale are not viable for the buyer, they can block the transfer. This protects the brand by ensuring new franchisees are set up for success. However, Buildingstars is not obligated to assess the business's value or guarantee the feasibility of the sale terms.
It is important to note that Buildingstars' approval of a transfer does not imply any warranty or assurance that the purchase price or terms of sale are economically feasible. Buildingstars explicitly disclaims any responsibility for making such a determination. Therefore, it is the franchisee's responsibility to ensure the financial viability of the transfer for the buyer.