What is the legal basis cited for the Federal District Court's jurisdiction in disputes between Buildingstars and its franchisees?
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 23 — RECEIPT (FDD pages 43–217)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, the legal basis for the Federal District Court's jurisdiction in disputes between Buildingstars and its franchisees is outlined in Item 23. Specifically, controversies, disputes, or claims arising from the franchise agreement will be filed in the Federal District Court in St. Louis, MO, when the grounds set forth in 28 U.S.C. § 1332 are present. This statute typically refers to diversity jurisdiction, where the parties are citizens of different states and the amount in controversy exceeds a certain threshold. Both parties 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.
However, the document also specifies exceptions. Claims relating to Buildingstars's trademarks, service marks, patents, or copyrights; claims related to leases or subleases between the parties; or requests by Buildingstars for injunctive relief can be brought in either federal or state courts in St. Louis County, MO. In these specific cases, both parties agree to submit to the jurisdiction of the state and federal courts in St. Louis County, MO.
If the Federal District Court in St. Louis does not have jurisdiction over a particular dispute, the parties are required to submit to binding arbitration. This indicates that Buildingstars prefers to resolve disputes through federal court if possible, but provides for arbitration as an alternative dispute resolution method when federal jurisdiction is lacking. A prospective franchisee should understand these jurisdictional stipulations, as they dictate where and how legal disputes with Buildingstars will be resolved.