How can Gold Star apply payments received from the franchisee?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
8.3 Electronic Debit Payments.
8.3.1 FRANCHISEE will pay continuing franchise fees and Brand Building Fees or any other amounts owed to the COMPANY (or its designee) under this Agreement or any other agreement by pre-authorized electronic debit from FRANCHISEE's bank or other financial institution account. On or before Tuesday of each week, the COMPANY or a designated third party supplier will unilaterally obtain FRANCHISEE's weekly sales information directly from FRANCHISEE's POS system for the preceding week ending on Sunday. In the event the COMPANY or its designated third party supplier is unable to directly obtain FRANCHISEE's weekly sales information for whatever reason, the COMPANY will notify FRANCHISEE and FRANCHISEE will provide to the COMPANY no later than Thursday the weekly sales report or such other information as the COMPANY may require, in a form prescribed by the COMPANY and certified by FRANCHISEE or by the designated individual, accurately reflecting FRANCHISEE's Gross Sales for the preceding week ending on Sunday. The amount of continuing franchise fees and Brand Building Fees due thereon will be calculated based on FRANCHISEE's Gross Sales report that has been obtained through the COMPANY's automated process or, alternatively, if the COMPANY or its designated third party supplier was unable to obtain the report from FRANCHISEE's POS system, and FRANCHISEE was thereby required to provide the weekly sales report manually, the amount of continuing franchise fees and Brand Building Fees shall be calculated based on the report submitted by FRANCHISEE. Each Tuesday, the COMPANY will debit FRANCHISEE's account in an amount equal to the continuing franchise fees and Brand Building Fees reported payable by FRANCHISEE and any amounts owed to the COMPANY under this Agreement or any other agreement. If FRANCHISEE fails to timely report its Gross Sales to the COMPANY by Thursday for any weekly reporting period, then the COMPANY will be authorized to debit FRANCHISEE's account in an amount equal to an average of the continuing franchise fees and Brand Building Fees payable by FRANCHISEE during the immediately preceding three-month period (or such shorter period as the Store has been in operation) for which weekly sales reports were received. FRANCHISEE is responsible for ensuring accuracy of the Gross Sales figure that is used for calculation of continuing franchise fees and Brand Building Fees. Nothing in this paragraph is to be construed to waive
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
Based on the 2025 Gold Star Franchise Disclosure Document, franchisees are obligated to make payments to Gold Star for continuing franchise fees, Brand Building Fees, and any other amounts owed under the Franchise Agreement or related agreements. These payments are typically collected through pre-authorized electronic debit from the franchisee's bank account.
According to the FDD, Gold Star or a designated third-party supplier will obtain the franchisee's weekly sales information directly from the POS system each week. The continuing franchise fees and Brand Building Fees are calculated based on these gross sales. If Gold Star cannot directly obtain the sales information, the franchisee must provide a weekly sales report. The company then debits the franchisee's account each Tuesday for the fees reported as payable.
If a Gold Star franchisee fails to report gross sales by the specified deadline, Gold Star is authorized to debit an amount equal to the average of the continuing franchise fees and Brand Building Fees payable during the preceding three-month period. The franchisee is responsible for ensuring the accuracy of the gross sales figure used for calculating these fees. This electronic debit system ensures consistent and timely payments to Gold Star, while also placing the onus on the franchisee to accurately report sales figures.