Against whom did Gold Star Chili, Inc. and GSC Properties, LLC file a complaint?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
igation**
Pending Item:
Gold Star Chili, Inc. and GSC Properties, LLC v. 21 Partners Group LLC and Rasem Daoud. Gold Star and GSC Properties filed a complaint against 21 Partners Group LLC, an existing franchisee, and Rasem Daoud, its owner, on June 14, 2024. On June 9, 2017, the
defendants executed a Lease Agreement with GSC Properties and a Franchise Agreement with Gold Star pursuant to which defendants operated a franchise (the "Hartwell Gold Star") at 21 East Galbraith Road, Cincinnati, Ohio 45216 (the "Property").
On October 9, 2021, there was a fire at the Property that resulted in a total loss of the Hartwell Gold Star. After the fire, the defendants ceased operating, never rebuilt, and retained insurance proceeds which were to be used to rebuild, the Hartwell Gold Star. Defendant 21 Partners was issued a check for $157,990.41 for replacement of furniture, fixtures, and equipment, but never provided Gold Star with these proceeds, despite having a contractual obligation to do so. Defendant 21 Partners provided Gold Star with building replacement insurance proceeds totaling $455,642.92, but the total cost for restoration is $1,106,670.00, a cost for which defendants are responsible.
The lawsuit was initiated in order to resolve these issues and is currently in the discovery phase.
Other than the foregoing, no litigation is required to be disclosed in this Item.
Source: Item 3 — Litigation (FDD pages 10–11)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, Gold Star Chili, Inc. and GSC Properties, LLC filed a complaint against 21 Partners Group LLC and Rasem Daoud on June 14, 2024. The complaint involves a franchise location known as the "Hartwell Gold Star" located in Cincinnati, Ohio. 21 Partners Group LLC, an existing franchisee, and Rasem Daoud, its owner, are the defendants in this case. The original lease agreement was signed June 9, 2017.
The dispute arose after a fire on October 9, 2021, resulted in a total loss of the Hartwell Gold Star location. Following the fire, the defendants allegedly ceased operations, did not rebuild the location, and retained insurance proceeds that were intended for rebuilding. Specifically, 21 Partners Group LLC received $157,990.41 for the replacement of furniture, fixtures, and equipment but allegedly did not provide these funds to Gold Star, despite a contractual obligation to do so.
Additionally, 21 Partners Group LLC provided Gold Star with $455,642.92 in building replacement insurance proceeds, but the total cost for restoration is claimed to be $1,106,670.00, for which the defendants are allegedly responsible. The lawsuit was initiated to resolve these issues and is currently in the discovery phase. This legal action is disclosed in Item 3 of the FDD, which covers litigation matters involving Gold Star.