How must the Brand Building Fee be paid to Gold Star?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
ng franchise fee, based on Gross Sales, in the amount of the Percentage Franchise Fee set forth on the cover page hereof. All continuing franchise fees are nonrefundable. Unless otherwise required in the Manual, the continuing franchise fee shall be payable by FRANCHISEE to the COMPANY on or before Tuesday of each week based on the Gross Sales for the preceding week ending on Sunday pursuant to the preauthorized debit arrangement described in Section 8.3, below.
- 8.1.8 A continuing brand building fee, based on Gross Sales, in the amount of the Percentage Brand Building Fee set forth on the cover page hereof (the "Brand Building Fee"), subject to increase or decrease by the COMPANY in its sole discretion (but not to exceed, in any calendar year, seven percent (7%) of FRANCHISEE's Gross Sales for such year without the written consent of FRANCHISEE). The Brand Building Fee will not be increased by more than 1% in any 12-month period. All Brand Building Fees are nonrefundable. Unless otherwise required in the Manual or pursuant to Section 8.3 below, the Brand Building Fee shall be payable by FRANCHISEE to the COMPANY (or the COMPANY's designee) for the COMPANY's Brand Building Fund (as defined in Section 9.3)) on or before Tuesday of each week based on the Gross Sales for the preceding week ending on Sunday pursuant to the preauthorized debit arrangement described in Section 8.2, below.
- 8.2 Certain Definitions. For the purposes of Section 8.1 above:
- 8.2.1 "New Restaurant" means a Restaurant that is not a Transferred Restaurant; and
- 8.2.2 "Transferred Restaurant" means a Restaurant that will be operated from a premises upon which a Gold Star Chili Restaurant was operating at any time during the previous six (6) months.
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.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the Brand Building Fee, which is a percentage of Gross Sales, must be paid to Gold Star (or their designee) for the Brand Building Fund. Unless the manual states otherwise, the Brand Building Fee is due on or before Tuesday of each week, based on the Gross Sales from the preceding week ending on Sunday.
Payment is facilitated through a preauthorized debit arrangement. Gold Star or a designated third-party supplier will obtain the franchisee's weekly sales information directly from the franchisee's POS system. If this is not possible, the franchisee must provide a weekly sales report to Gold Star no later than Thursday. The amount due for the Brand Building Fee will be calculated based on the Gross Sales reported through the automated POS system or the franchisee-submitted report.
Each Tuesday, Gold Star will debit the franchisee's account for the continuing franchise fees and Brand Building Fees. If a franchisee fails to report Gross Sales by the Thursday deadline, Gold Star is authorized to debit an amount equal to the average of the fees payable during the preceding three-month period (or a shorter period if the store has been open for less than three months). The franchisee is responsible for ensuring the accuracy of the Gross Sales figure used for calculating these fees.
It's important to note that the Brand Building Fee is subject to change at Gold Star's discretion, but it cannot exceed 7% of the franchisee's Gross Sales in any calendar year without the franchisee's written consent. Furthermore, the Brand Building Fee will not increase by more than 1% in any 12-month period. All Brand Building Fees are nonrefundable.