To whom are building, construction, and leasehold improvement costs paid when opening a Gold Star franchise?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
YOUR ESTIMATED INITIAL INVESTMENT 1
| Type of Expenditure | Amount for Free Standing Building | Amount for Inline Space | Method of Payment | When Due | To Whom Payment Is To Be Made |
|---|---|---|---|---|---|
| Initial Franchise Fee2 | $10,000 to $50,000 | $10,000 to $50,000 | Cashier’s Check | At signing of the Franchise Agreement |
Source: Item 7 — Estimated Initial Investment (FDD pages 18–21)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the costs for building, construction, and leasehold improvements for both free-standing buildings and inline spaces are paid as arranged and when due, as specified in Note 4. The specific recipients of these payments are detailed in the table outlining the estimated initial investment.
For a free-standing Gold Star restaurant, these costs range from $287,930 to $1,207,022, while for an inline space, the costs range from $287,618 to $400,000. Note 4 indicates that if a franchisee does not already own or lease an appropriate site, they must purchase or lease one. The document estimates that minimum rent for a restaurant (excluding Special Purpose Outlets) is between $36,000 and $90,000 per year. However, the costs of renovation or construction, and improvements, for purchased or leased premises may vary tremendously and cannot be estimated with any accuracy.
Prospective franchisees should be aware that these costs can vary significantly based on factors such as location, size, and condition of the premises. It is crucial to conduct thorough due diligence and obtain detailed estimates for construction and leasehold improvements specific to the chosen site. Given the wide range of potential costs, franchisees should carefully consider their budget and financing options before committing to a location. Consulting with experienced contractors and real estate professionals is advisable to ensure accurate cost projections and avoid unexpected expenses during the build-out phase.