For Buildingstars franchises in Illinois, is a clause designating jurisdiction and venue outside of Illinois enforceable?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
FRANCHISEE acknowledges that this Agreement was accepted in the State of Missouri.
Except to the extent that this Agreement or any particular dispute is governed by the U.S.
Trademark Act of 1946 (Lanham Act, 115 U.S.C. 1051), this Agreement will be governed, to the extent permissible, by the laws of the State of Missouri (without reference to its conflict of laws principles).
If, however, any provision of this Agreement would not be enforceable under the laws of Missouri, and if the Business is located outside of Missouri and the provision would be enforceable under the laws of the state in which the Business is located, then the provision in question (and only that provision) will be interpreted and construed under the laws of the state where the Business is located.
Further, any law regulating the offer or sale of franchises, business opportunities or similar interests or governing the relationship between a franchisor and a franchisee or any similar relationship (including the Missouri Merchandising Practices Act, Section 407.400 et.al), will not apply unless its jurisdictional requirements are met independently without reference to this Section XVI.H.
BUILDINGSTARS may institute any action arising out of or relating to this Agreement in any state or federal court of general jurisdiction in the State of Missouri, and FRANCHISEE and guarantors irrevocably submit to their jurisdiction and waive any objection to the application of Missouri law or to the jurisdiction or venue in those Missouri courts.
If any valid applicable law or regulation [in effect at the time this Agreement is executed] of a governmental authority having jurisdiction over this Agreement limits BUILDINGSTARS' rights of rescission or termination or require longer notice periods than set forth herein, this Agreement shall be deemed amended to conform to the minimum notice periods or restrictions upon rescission or termination required by such laws or regulations.
The provisions of this Agreement which conflict with the applicable law shall (only to the extent not in accordance with applicable law) be ineffective, and in their stead, BUILDINGSTARS shall comply with applicable law respecting each of said matters.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, the franchise agreement includes provisions regarding governing law and jurisdiction. The agreement states that it was accepted in Missouri and will generally be governed by Missouri law, to the extent permissible. However, there's an exception: if any provision of the agreement is unenforceable under Missouri law, but enforceable under the law of the state where the Buildingstars business is located, then the law of the state where the business is located will govern that specific provision.
For a Buildingstars franchise in Illinois, this means that while the agreement generally defaults to Missouri law, any clause that is unenforceable under Missouri law but enforceable under Illinois law would be subject to Illinois law. This could potentially include clauses related to jurisdiction and venue.
The FDD also specifies that Buildingstars may initiate legal actions in Missouri courts, and the franchisee submits to the jurisdiction and venue of those courts. However, this is qualified by the statement that any law regulating franchises or the relationship between franchisor and franchisee will not be superseded unless its jurisdictional requirements are independently met. Furthermore, if any applicable law limits Buildingstars's rights or requires longer notice periods, the agreement is deemed amended to conform to those requirements. The enforceability of clauses designating jurisdiction and venue outside of Illinois for a Buildingstars franchise operating in Illinois depends on whether such clauses are consistent with Illinois law and public policy. A prospective franchisee should consult with legal counsel to determine the enforceability of specific clauses under Illinois law.