What happens if the Federal District Court does not have jurisdiction over the dispute between Buildingstars and the franchisee?
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.
C. Arbitration. In the event that the federal court described above does not have subject matter jurisdiction over the dispute, the parties, subject to all other provisions above, will submit the dispute to binding arbitration conducted in St. Louis County, MO (unless the parties mutually agree otherwise). The arbitration proceeding will be conducted in accordance with the then current commercial arbitration rules of the American Arbitration Association ("AAA Rules"), except to the extent the AAA Rules differ from the terms of this Agreement, in which event the terms of this Agreement will apply. Notwithstanding the foregoing, the arbitration does not have to be conducted under the AAA. The arbitrator must be mutually selected by the parties and must have at least 5 years of substantial experience in franchise law. Each party will be limited to 25 document requests, 15 interrogatories and 1 deposition unless otherwise agreed to between the parties. For purposes of this Section, if any dispute that names, involves or includes BUILDINGSTARS, it respective affiliates, officers, directors, agents, brokers or employees, such persons or entities shall also be included in and made party to the arbitration proceeding to the extent such parties consent to proceeding forward in arbitration.
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 will submit to binding arbitration. This arbitration will be conducted in St. Louis County, MO, unless both parties agree to a different location.
The arbitration proceeding 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. However, the arbitration does not have to be conducted under the AAA. The arbitrator must be mutually selected by Buildingstars and the franchisee and possess at least five years of experience in franchise law.
During arbitration, each party is limited to 25 document requests, 15 interrogatories, and one deposition unless they agree otherwise. The FDD specifies that if a dispute involves Buildingstars, its affiliates, officers, directors, agents, brokers, or employees, these individuals or entities will also be included in the arbitration proceeding if they consent to participate.