Is there an exception to the governing law of the Buildingstars Franchise Agreement?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
FRANCHISEE acknowledges that this Agreement was accepted in the State of Missouri.
Except to the extent that this Agreement or any particular dispute is governed by the U.S.
Trademark Act of 1946 (Lanham Act, 115 U.S.C. 1051), this Agreement will be governed, to the extent permissible, by the laws of the State of Missouri (without reference to its conflict of laws principles).
If, however, any provision of this Agreement would not be enforceable under the laws of Missouri, and if the Business is located outside of Missouri and the provision would be enforceable under the laws of the state in which the Business is located, then the provision in question (and only that provision) will be interpreted and construed under the laws of the state where the Business is located.
Further, any law regulating the offer or sale of franchises, business opportunities or similar interests or governing the relationship between a franchisor and a franchisee or any similar relationship (including the Missouri Merchandising Practices Act, Section 407.400 et.al), will not apply unless its jurisdictional requirements are met independently without reference to this Section XVI.H.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, the Franchise Agreement is generally governed by Missouri law. However, there are exceptions to this rule. If any part of the agreement is unenforceable under Missouri law, but is enforceable under the laws of the state where the Buildingstars business is located (outside of Missouri), then that specific part of the agreement will be interpreted and enforced according to the laws of the state where the business is located.
This means that while Buildingstars has chosen Missouri law to generally govern the agreement, franchisees operating outside of Missouri may find that certain provisions are actually governed by their local state laws if those provisions are unenforceable in Missouri but enforceable in their own state. This could impact how certain disputes are resolved or how specific terms of the agreement are interpreted.
Furthermore, the document states that any laws regulating franchises, business opportunities, or franchisor-franchisee relationships, such as the Missouri Merchandising Practices Act, will only apply if their jurisdictional requirements are met independently, without relying on the agreement's section regarding governing law. This clarifies that Buildingstars cannot use the governing law clause to avoid compliance with franchise-specific laws that would otherwise apply based on the franchisee's location or other factors. Franchisees should consult with a legal professional to understand how these provisions may affect their rights and obligations under the Franchise Agreement.