Does the Buildingstars franchise agreement require both parties and each guarantor to irrevocably submit to the jurisdiction of the Federal District Court in St. Louis, MO?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
B. Litigation. Except as otherwise provided in this Agreement, all controversies, disputes or claims between BUILDINGSTARS and FRANCHISEE arising from this Agreement or the franchise relationship set forth in this Agreement shall be filed in the Federal District Court in St. Louis, MO when the grounds set forth in 28 U.S.C.§ 1332 are present. Both parties and each guarantor of this Agreement irrevocably submit to the jurisdiction of this court and waive any objection to the application of Missouri law or to the jurisdiction or venue in this court. In the event that the above-referenced federal court does not have jurisdiction over the dispute, the parties shall submit to binding arbitration as provided below.
Notwithstanding the foregoing, any claims BUILDINGSTARS has relating to its trademarks, service marks, patents, or copyrights, including the Marks; claims relating to any lease or sublease of any real property between the parties or their affiliated entities; or requests by BUILDINGSTARS for temporary restraining orders, preliminary injunctions, permanent injunctions or other proceedings in a court of competent jurisdiction to obtain interim or permanent relief when deemed necessary by such court to preserve the status quo or prevent irreparable injury pending resolution of the actual dispute between the parties shall be brought in either federal or state courts in St. Louis County, MO. Both parties agree to submit to the jurisdiction of the state and federal court in St. Louis County, MO.
Source: Item 23 — RECEIPT (FDD pages 43–217)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, the franchise agreement stipulates that controversies, disputes, or claims between Buildingstars and the franchisee arising from the agreement will be filed in the Federal District Court in St. Louis, MO, under specific conditions. This applies when the grounds set forth in 28 U.S.C. § 1332 are present. Both parties, including any guarantors of the agreement, must irrevocably submit to the jurisdiction of this court. They also waive any objections to the application of Missouri law or to the jurisdiction or venue in this court.
However, there are exceptions to this rule. If the Federal District Court in St. Louis, MO, does not have jurisdiction over the dispute, the parties must submit to binding arbitration. This arbitration will be conducted in St. Louis County, MO, unless both parties agree to a different location. The arbitration will follow the commercial arbitration rules of the American Arbitration Association (AAA), unless those rules conflict with the terms of the Buildingstars franchise agreement, in which case the agreement's terms will prevail.
Furthermore, Buildingstars retains the right to bring certain claims, such as those relating to its trademarks, service marks, patents, or copyrights, as well as claims related to leases or requests for injunctive relief, in either federal or state courts in St. Louis County, MO. In these specific cases, both parties agree to submit to the jurisdiction of the state and federal courts in St. Louis County, MO. This multi-tiered approach to dispute resolution means a franchisee could potentially face litigation or arbitration in Missouri, depending on the nature of the dispute and the court's jurisdiction.