What are the Buildingstars franchisee's obligations regarding dispute resolution (Item 9) and where can more information be found (Item 17)?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
nification is prohibited by law, including, an indemnification of any Indemnified Party from its own negligence, if prohibited by law. To the extent indemnification of any party hereunder would be prohibited by law, this provision shall not apply to such party with respect to such otherwise indemnifiable act but shall continue to be effective as to all other parties with respect to whom indemnification is not prohibited by applicable law.
XV. DISPUTE RESOLUTION
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.
Notwithstanding the foregoing, the obligation of this Section to mediate will not be binding with respect to claims brought by BUILDINGSTARS and relating to BUILDINGSTARS's 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.
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.
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, franchisees are obligated to participate in mediation before initiating any court action regarding disputes with Buildingstars. This mediation must occur in St. Louis County, Missouri, unless both parties agree to an alternative location. The mediation process should follow the American Arbitration Association (AAA) mediation rules, but the terms of the Franchise Agreement will take precedence if there are conflicts. The franchisee is responsible for covering the costs associated with the mediation, including the mediator's fees and expenses. All discussions and offers made during mediation are confidential and cannot be used in any subsequent legal proceedings. Failure to engage in mediation before starting litigation or arbitration can result in dismissal of those proceedings.
If mediation fails to resolve the dispute, Buildingstars and the franchisee agree to resolve the dispute according to the sections outlined in the franchise agreement. Furthermore, franchisees must submit any claims that would constitute a compulsory counterclaim within the same proceeding as the original claim. Arbitration will be conducted on an individual basis, not as a class-wide action, and consolidation of arbitration proceedings with third parties is not allowed.
If a Buildingstars franchisee fails to comply with the dispute resolution provisions, they will be responsible for reimbursing Buildingstars for all expenses incurred in addressing the breach, including attorney's fees, and must pay a $50,000 Dispute Resolution Fee. Buildingstars retains the right to collect these amounts in addition to any other rights they may have for non-compliance under the agreement. The FDD does not specify where more information can be found regarding dispute resolution in Item 17.