In the Buildingstars franchise agreement, what is the effect of all statements and settlement offers made during mediation on future court or arbitration proceedings?

According to Buildingstars's 2025 Franchise Disclosure Document, all negotiations and mediation proceedings are strictly confidential. This encompasses any discovery conducted, statements made, and settlement offers proposed by either party or the mediator during the mediation process.

These discussions and offers are treated as compromise and settlement negotiations, aligning with the Federal Rules of Evidence and state rules of evidence. Consequently, none of the information disclosed or proposed during mediation can be admitted or used in any subsequent court or arbitration proceeding, regardless of the purpose. Furthermore, the mediator is prohibited from being called as a witness in any future court or arbitration proceeding.

This provision aims to encourage open and honest communication during mediation, without the fear that statements or offers made during the process could be used against a party later on. It promotes a more conducive environment for settlement discussions, as parties can explore potential resolutions without prejudice to their legal positions in case mediation is unsuccessful. This is a fairly standard practice in franchise agreements, as it supports alternative dispute resolution methods before resorting to litigation or arbitration.