Can Gold Star's affiliates also exercise the right to set off amounts owed by the franchisee?

According to Gold Star's 2025 Franchise Disclosure Document, Gold Star and its affiliates have the right to set off any amounts the franchisee owes them. This right can be exercised against any amounts Gold Star owes the franchisee for the purchase of assets under Section 15.2 of the franchise agreement. This is a standard clause in many franchise agreements.

For a prospective franchisee, this means that if you owe Gold Star or any of its affiliated companies money, those entities can deduct that amount from any payment they owe you for purchasing your restaurant's assets. This could occur, for example, if Gold Star decides to buy back your franchise location when you decide to sell or at the end of your franchise term.

It is important for franchisees to understand this right of set off, as it can impact the amount of money they receive in certain situations. Franchisees should maintain good financial records and communication with Gold Star to avoid any disputes regarding amounts owed. Franchisees should also consult with a legal and financial advisor to fully understand the implications of this clause.