What happens if the federal court does not have jurisdiction over the Buildingstars dispute?
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 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, if the Federal District Court in St. Louis, MO, does not have jurisdiction over a dispute between Buildingstars and a franchisee, the parties must submit to binding arbitration. This arbitration will take place in St. Louis County, MO, unless both parties agree to a different location.
The arbitration process will follow the commercial arbitration rules of the American Arbitration Association (AAA), but the terms of the Franchise Agreement will take precedence if there are any conflicts. The document clarifies that the arbitration does not necessarily have to be conducted under the AAA. The arbitrator must be selected mutually by both parties and possess at least five years of experience in franchise law.
To ensure efficiency, each party is limited to 25 document requests, 15 interrogatories, and one deposition, unless they agree otherwise. The FDD specifies that any dispute involving Buildingstars, its affiliates, officers, directors, agents, brokers, or employees will be included in the arbitration, provided these parties consent to participate.