Does the obligation to mediate apply to claims brought by Buildingstars relating to trademarks?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — RECEIPT (FDD pages 43–217)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, the obligation to mediate does not apply to claims brought by Buildingstars relating to its trademarks, service marks, patents, or copyrights. This means that Buildingstars is not required to participate in mediation before bringing a lawsuit in court regarding these specific types of claims.
For a prospective franchisee, this is important because it means that Buildingstars can directly pursue legal action against a franchisee for trademark or intellectual property infringements without first attempting to resolve the issue through mediation. This could potentially lead to quicker and more decisive action by Buildingstars in protecting its brand and intellectual property.
However, this exception to mediation only applies to claims brought by Buildingstars. Franchisees are still generally required to attempt mediation before initiating legal action against Buildingstars, creating a potential power imbalance in dispute resolution. Franchisees should be aware of this and consider the potential costs and risks associated with disputes that may arise during the franchise relationship.
This type of clause is not uncommon in franchise agreements, as franchisors often seek to protect their intellectual property rights aggressively. Prospective franchisees should carefully review the dispute resolution section of the Franchise Agreement and understand their rights and obligations in the event of a dispute with Buildingstars.