Are settlement offers made during Buildingstars mediation admissible in court?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
All negotiations and mediation proceedings (including without limitation, discovery conducted therein, as well as all statements and settlement offers made by either party or the mediator in connection with the Mediation) shall be strictly confidential, shall be considered as compromise and settlement negotiations for purposes of the Federal Rules of Evidence and state rules of evidence, and shall not be admissible or otherwise used in connection with any court or arbitration proceeding for any purpose. The mediator may not be called as a witness in any 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.
Source: Item 23 — RECEIPT (FDD pages 43–217)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, all negotiations and mediation proceedings are strictly confidential and inadmissible in court or arbitration. This includes any discovery conducted during mediation, as well as all statements and settlement offers made by either party or the mediator.
This means that if a dispute arises between a Buildingstars franchisee and the company, and they attempt to resolve it through mediation, any offers or statements made during that process cannot be used as evidence if the dispute later goes to court or arbitration. This encourages open and honest communication during mediation, as parties can feel more comfortable making offers and exploring potential resolutions without fear of those statements being used against them later.
The mediator is also protected, as they cannot be called as a witness in any court or arbitration proceeding. This further ensures the confidentiality and integrity of the mediation process. Buildingstars requires that disputes first be submitted to nonbinding mediation before any action is brought in court. 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.