Does the litigation clause apply to Buildingstars' claims relating to leases?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, the litigation clause does apply to Buildingstars' claims relating to leases or subleases of real property between the parties or their affiliated entities. Specifically, Buildingstars is not obligated to mediate claims relating to leases or subleases.
Instead, Buildingstars can bring these claims 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. This means that Buildingstars has the option to pursue litigation against a franchisee in St. Louis County courts for disputes related to leases, without first being required to attempt mediation.
This clause provides Buildingstars with a direct legal recourse for lease-related disputes, potentially expediting the resolution process. For a prospective franchisee, this highlights the importance of understanding the lease terms and fulfilling their obligations to avoid potential litigation. It also clarifies the specific jurisdiction where such disputes would be handled, which is St. Louis County, MO.