In the event of a conflict between AAA Mediation Rules and the Buildingstars franchise agreement, which terms prevail?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
Before any party may bring an action in court for any controversy, dispute or claim between BUILDINGSTARS and FRANCHISEE arising from this Agreement or the franchise relationship set forth in this Agreement, the parties must first have a conference with each other to try to resolve the dispute. If this fails to bring about a resolution, the dispute will first be submitted to nonbinding mediation (the "Mediation") in St. Louis County, Missouri unless the parties mutually agree to another location. The Mediation shall be conducted in accordance with then-current AAA mediation rules (the "AAA Mediation Rules") except to the extent the AAA Mediation Rules differ from the terms of this Agreement, in which event the terms of this Agreement shall be applied. Notwithstanding the foregoing, the mediation does not have to be conducted under the AAA. BUILDINGSTARS and
FRANCHISEE will select the mediator. If the parties cannot agree on the selection of a mediator, the mediation shall be conducted through the AAA who will make the selection of mediator using their rules and guidelines. The cost of the Mediation, including the mediator's fee and expenses, shall be paid by the FRANCHISEE.
Source: Item 23 — RECEIPT (FDD pages 43–217)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, in the event of a conflict between the American Arbitration Association (AAA) mediation rules and the terms outlined in the Buildingstars franchise agreement, the terms of the franchise agreement will take precedence. This means that while mediation will be conducted following AAA mediation rules, any deviation between those rules and the specific stipulations in the Buildingstars agreement will be resolved in favor of the agreement's terms.
This clause ensures that the specific conditions negotiated and agreed upon in the franchise agreement remain the governing framework for dispute resolution. For a prospective franchisee, this highlights the importance of carefully reviewing and understanding every clause within the franchise agreement, as these terms will dictate how disputes are handled, even when standard mediation rules might suggest otherwise.
For example, the FDD states that mediation does not have to be conducted under the AAA. Buildingstars and the franchisee will select the mediator, but if they cannot agree, the AAA will select the mediator using their rules and guidelines. The franchisee is responsible for the cost of mediation, including the mediator's fees and expenses. This is a deviation from the standard AAA rules, and the terms of the Buildingstars agreement will apply.