What capacity must a Gold Star franchisee's bank account have?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
FRANCHISEE will maintain a business account at a bank or other financial institution with the capacity to electronically debit FRANCHISEE's account.
- 8.3.3 FRANCHISEE will maintain an account balance sufficient to make all continuing franchise fees, Brand Building Fees, and other payments to the COMPANY by electronic transfer, and any insufficiency will be considered a default in payment pursuant to Section 14.5.1 of this Agreement.
FRANCHISEE will promptly reimburse the COMPANY for any charges incurred by the COMPANY due to a shortage of funds in FRANCHISEE's account.
- 8.3.4 FRANCHISEE will maintain a single bank account for its business operations and for the payment of continuing franchise fees, Brand Building Fees or any other amounts payable to the COMPANY.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, a franchisee must maintain a business account at a bank or financial institution with the capacity to electronically debit the franchisee's account. This is to allow Gold Star to collect payments for continuing franchise fees, Brand Building Fees, and any other amounts payable to the company via electronic fund transfer.
In practical terms, this means a prospective Gold Star franchisee needs to ensure their chosen bank account is set up to allow electronic debits. The franchisee must also complete and execute an "Authorization for Electronic Fund Transfers" form to authorize Gold Star to initiate these debit entries.
Furthermore, the franchisee is obligated to maintain a sufficient account balance to cover all fees and payments to Gold Star. Insufficient funds will be considered a default in payment, potentially leading to penalties as outlined in Section 14.5.1 of the franchise agreement. The franchisee is also responsible for promptly reimbursing Gold Star for any charges incurred by the company due to a shortage of funds in the franchisee's account. The franchisee must maintain a single bank account for its business operations and for the payment of continuing franchise fees, Brand Building Fees or any other amounts payable to the COMPANY.