What is the Brand Building Fund used for by Gold Star?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
approved by Gold Star or otherwise approved by Gold Star. Franchisees, however, are required to assign to Gold Star or its designee all product and/or advertising rebates or allowances received from certain suppliers related to the Franchise (currently assignments are required for our soft drink supplier only). It is Gold Star's current practice to have these assigned payments made to GSCAA for deposit to and use in the Brand Building Fund. Gold Star receives product and/or advertising rebates or allowances from the same suppliers. The terms are the same for Gold Star and the Franchisees. Although not obligated to do so by the Franchise Agreement or any related agreement, it is Gold Star's current practice to transfer the product and/or advertising rebates and allowances Gold Star itself receives from these suppliers to the Brand Building Fund. Approximately $613,262 was received by GSCAA during the year ended December 31, 2024 pursuant to these supplier rebates and advertising allowances for Gold Star and its franchisees (the above information was derived from the books and records of GSCAA). GSCAA does not sell or lease products or services to franchisees or derive revenue from operations but merely receives Brand Building Fees and supplier assignment proceeds and oversees the Brand Building Fund as Gold Star's designee.
Gold Star does not provide material benefits to Franchisees based on a Franchisee's use of designated or approved sources.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 21–25)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the Brand Building Fund is used to support the brand. Franchisees are required to assign product and advertising rebates or allowances received from certain suppliers to Gold Star or its designee, which is currently required for their soft drink supplier. Gold Star's current practice is to have these assigned payments made to GSCAA for deposit to and use in the Brand Building Fund.
Gold Star also receives product and/or advertising rebates or allowances from the same suppliers, and although not obligated to do so, it is their current practice to transfer these rebates and allowances to the Brand Building Fund as well. During the year ended December 31, 2024, GSCAA received approximately $613,262 pursuant to these supplier rebates and advertising allowances for Gold Star and its franchisees. GSCAA does not sell or lease products or services to franchisees or derive revenue from operations but merely receives Brand Building Fees and supplier assignment proceeds and oversees the Brand Building Fund as Gold Star's designee.
At Gold Star's discretion, national account marketing funds from soft drink suppliers based on gallons purchased and promotional opportunities and other supplier partners who offer marketing or rebate funds may or may not be directed to the GSCAA for use in the Brand Building Fund. 100% of the rebated marketing funds from soft drink and other partner suppliers received during 2024 were allocated to the Brand Building Fund. This means that the Brand Building Fund is supported by both franchisee and franchisor contributions from supplier rebates and allowances, and is managed by GSCAA on behalf of Gold Star.