What is the anticipated timeframe for expending contributions to the Gold Star Brand Building Fund?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
rochures and other marketing materials.
- 9.3.4 All contributions paid by franchisees to the Brand Building Fund shall be maintained in an account separate from the other monies of the COMPANY (or its designee), and shall not be used to defray any of the COMPANY's (or its designee's) expenses, except to repay any advances made by the COMPANY or such designee to the Brand Building Fund. The Brand Building Fund and the earnings therefrom shall not otherwise inure to the benefit of the COMPANY or its designee.
- 9.3.5 It is anticipated that all contributions to, and earnings of, the Brand Building Fund shall be expended during the taxable year within which the contributions and earnings are received.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, contributions to the Brand Building Fund, along with any earnings, are anticipated to be spent during the same taxable year they are received. This means that the funds collected from franchisees for advertising and marketing efforts are intended to be used promptly.
Gold Star specifies the order in which the Brand Building Fund's expenditures are made. First, earnings from previous years are used. Then, earnings from the current year are used. Finally, contributions from franchisees are used. This ensures that the earnings generated by the fund are utilized before dipping into the franchisees' direct contributions.
Gold Star also retains the right to terminate or suspend the Brand Building Fund at any time. However, the document states that the fund cannot be terminated until all monies within it have been spent according to the expenditure guidelines. This provides some assurance to franchisees that the contributions they make will be used for their intended purpose, even if the fund's operation is discontinued.