What is the Brand Building Fund called for Gold Star franchisees?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
- 9.3 Brand Building Fund. FRANCHISEE shall participate in the COMPANY's marketing fund (the "Brand Building Fund") as the COMPANY shall direct. Subject to written instructions from the COMPANY, FRANCHISEE shall pay all or a portion of the Brand Building Fee directly to the Brand Building Fund. The Brand Building Fund is currently administered by the Gold Star Chili Advertising Association, an Ohio nonprofit corporation, of which the COMPANY is the only member.
- 9.3.1 The COMPANY, or its designee, shall oversee all Brand Building Fund advertising, with sole discretion to determine, approve or disapprove the creative concepts, materials and media used in such advertising, and the placement, type, scope and allocation of the Brand Building Fund advertising. FRANCHISEE agrees and acknowledges that the Brand Building Fund advertising is intended to maximize general public recognition and acceptance of the Marks, Proprietary Products and System and that the COMPANY and its designee undertake no obligation, in
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the company's marketing fund is referred to as the "Brand Building Fund." Franchisees are required to participate in this fund as directed by Gold Star. Franchisees may be required to pay all or a portion of their Brand Building Fee directly to the Brand Building Fund. The Brand Building Fund is currently managed by the Gold Star Chili Advertising Association, which is an Ohio nonprofit corporation. Gold Star is the only member of this association.
Gold Star, or its designee, has the authority to oversee all advertising related to the Brand Building Fund. They have the sole discretion to make decisions regarding creative concepts, materials, media, placement, type, scope, and allocation of advertising. The advertising aims to maximize public recognition and acceptance of Gold Star's trademarks, proprietary products, and overall system. Gold Star does not guarantee that any individual franchisee will directly benefit from the advertising or promotion conducted through the Brand Building Fund.
Franchisees are also obligated to spend a minimum of 1% of their gross sales on local media and advertising, in addition to their other obligations. This is termed the "Local Marketing Expenditure." Franchisees must report these expenditures to Gold Star upon request. If the Brand Building Fund is suspended or terminated, or if the required Brand Building Fee percentage is less than 7%, Gold Star may increase the Local Marketing Expenditure up to 7% of the franchisee's gross sales. However, the combined total of the Local Marketing Expenditure and any required Brand Building Fees cannot exceed 7% of the franchisee's gross sales in any calendar year.