Does the Buildingstars franchise agreement specify that mediation must be conducted under AAA rules?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
A. Mediation. 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. All negotiations and mediation proceedings (including without limitation, discovery conducted therein, as well as all statements and settlement offers made by either party or the mediator in connection with the Mediation) shall be strictly confidential, shall be considered as compromise and settlement negotiations for purposes of the Federal Rules of Evidence and state rules of evidence, and shall not be admissible or otherwise used in connection with any court or arbitration proceeding for any purpose. The mediator may not be called as a witness in any court or arbitration proceeding for any purpose. If the parties, after a good faith effort to settle the dispute using Mediation, are unable to reach settlement, BUILDINGSTARS and FRANCHISEE agree that the dispute will be resolved according to the Sections below. Failure to submit the dispute to Mediation prior to commencing any litigation or arbitration proceeding shall be grounds for dismissal of the litigation or arbitration proceedings.
Source: Item 23 — RECEIPT (FDD pages 43–217)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, before a franchisee can bring legal action against Buildingstars, both parties must first attempt to resolve the dispute through a conference. If that fails, the dispute must be submitted to nonbinding mediation in St. Louis County, Missouri, unless both parties agree to a different location.
The mediation is to be conducted following the American Arbitration Association (AAA) mediation rules, but with an important exception. If the AAA rules differ from the terms outlined in the Buildingstars franchise agreement, the franchise agreement terms will take precedence. The document also states that the mediation does not have to be conducted under the AAA.
Buildingstars and the franchisee will jointly select the mediator. However, if they cannot agree on a mediator, the AAA will select the mediator based on their rules and guidelines. The franchisee is responsible for covering the costs of the mediation, including the mediator's fees and expenses. All aspects of the mediation, including negotiations, discovery, statements, and settlement offers, must remain confidential and are inadmissible in any subsequent court or arbitration proceedings. If mediation does not resolve the dispute, Buildingstars and the franchisee will proceed to resolve the dispute as outlined in further sections of the franchise agreement.