Can the Gold Star Brand Building Fund earnings inure to the benefit of the company?

According to Gold Star's 2025 Franchise Disclosure Document, the Brand Building Fund and its earnings are not intended to benefit Gold Star. The document specifies that the Brand Building Fund, including all contributions and earnings, must be used exclusively for the costs associated with maintaining, administering, and directing advertising, promotional, and public relations activities. These activities can be local, regional, or national. Examples include creating advertising campaigns for television, radio, magazines, and newspapers, as well as direct mail, billboard advertising, marketing surveys, and employing advertising agencies and consultants.

Gold Star or its designee can withhold a portion of the Brand Building Fees to cover reasonable salaries, administrative costs, and overhead related to the activities. The remaining balance is then contributed to the Brand Building Fund for the specified purposes. All contributions paid by franchisees are to be kept in a separate account from Gold Star's other monies and can only be used to repay any advances made by Gold Star to the Brand Building Fund.

Furthermore, the FDD states that 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. This further reinforces the intention that the funds are to be used for the benefit of the franchise system as a whole, rather than accruing to the benefit of Gold Star itself.