Besides termination, what other remedies does Gold Star have if a franchisee is late on a payment?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
ents Unconditional**. All amounts payable by FRANCHISEE to the COMPANY or any affiliate under or in connection with this Agreement shall be made without set-off or deduction for any reason whatsoever (including but not limited to any alleged breach by the COMPANY of any obligations to FRANCHISEE), and if not paid when due shall bear interest from the date due until paid at the rate of one and one-half percent (1.5%) per month, or the maximum rate permitted by law, whichever is less. Any payment not made when due also shall be subject to a late payment administrative charge of One Hundred Dollars ($100). Entitlement to such interest and charge shall be in addition to the COMPANY's right to terminate this Agreement and any other remedies the COMPANY may have with respect to such late payment.
- 8.5 Company's Sole Discretion. Notwithstanding any designation by FRANCHISEE, the COMPANY shall have sole discretion to apply any payments by FRANCHISEE to any past due obligations of FRANCHISEE to the
- COMPANY or its affiliates in such manner and order as the COMPANY deems appropriate in its sole discretion.
- 8.6 Company's Security Interest. FRANCHISEE hereby grants the COMPANY a first priority security interest in all invent
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, if a franchisee fails to make payments on time, Gold Star has remedies in addition to terminating the franchise agreement. Specifically, Gold Star will assess a late payment administrative charge of $100 for any payment not made when due.
Furthermore, Gold Star retains the right to apply any payments made by the franchisee to any outstanding debts owed to Gold Star or its affiliates. This allows Gold Star to prioritize the order in which debts are settled, ensuring that past due obligations are addressed.
Additionally, the franchisee grants Gold Star a first priority security interest in all inventories, supplies, and equipment, as well as any items sold by Gold Star to the franchisee. This security interest serves to secure the payment of any of the franchisee's obligations to Gold Star. Gold Star can also execute documents to perfect its security interest on behalf of the franchisee.