Under what condition will Buildingstars and the franchisee submit to binding arbitration?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
C. Arbitration. In the event that the federal court described above does not have subject matter jurisdiction over the dispute, the parties, subject to all other provisions above, will submit the dispute to binding arbitration conducted in St. Louis County, MO (unless the parties mutually agree otherwise). The arbitration proceeding will be conducted in accordance with the then current commercial arbitration rules of the American Arbitration Association ("AAA Rules"), except to the extent the AAA Rules differ from the terms of this Agreement, in which event the terms of this Agreement will apply. Notwithstanding the foregoing, the arbitration does not have to be conducted under the AAA. The arbitrator must be mutually selected by the parties and must have at least 5 years of substantial experience in franchise law. Each party will be limited to 25 document requests, 15 interrogatories and 1 deposition unless otherwise agreed to between the parties. For purposes of this Section, if any dispute that names, involves or includes BUILDINGSTARS, it respective affiliates, officers, directors, agents, brokers or employees, such persons or entities shall also be included in and made party to the arbitration proceeding to the extent such parties consent to proceeding forward in arbitration.
Source: Item 23 — RECEIPT (FDD pages 43–217)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, Buildingstars and the franchisee will submit to binding arbitration if the federal court in St. Louis, MO, does not have subject matter jurisdiction over the dispute. In such cases, the dispute will be submitted to binding arbitration conducted in St. Louis County, MO, unless both parties agree to a different location.
The arbitration proceeding will follow the American Arbitration Association (AAA) rules, but if those rules conflict with the franchise agreement, the agreement's terms will take precedence. The arbitration does not necessarily have to be conducted under the AAA. The arbitrator must be mutually selected by both parties and possess at least five years of experience in franchise law. Each party is limited to 25 document requests, 15 interrogatories, and one deposition unless they agree otherwise.
Furthermore, if any dispute involves Buildingstars, its affiliates, officers, directors, agents, brokers, or employees, these parties will also be included in the arbitration proceeding, provided they consent to participate. This clause ensures that all related parties can be part of the arbitration if they agree to it, streamlining the resolution process and preventing multiple legal battles over the same issue.