Are claims against a Gold Star franchisee by the company for injunctive relief relating to financial obligations upon termination exempt from the one-year limitation?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
Except for: (i) claims against FRANCHISEE concerning the underreporting of Gross Sales and corresponding underpayment of continuing franchise and Brand Building Fees, (ii) claims against FRANCHISEE by The COMPANY relating to third party claims or suits brought against The COMPANY as a result FRANCHISEE's operation of the Store, (iii) claims for injunctive relief to enforce the provisions of this Agreement relating to FRANCHISEE's use of the Marks, (iv) claims against FRANCHISEE by The COMPANY for injunctive relief relating to FRANCHISEE's financial obligations upon the termination or expiration of this Agreement, (v) claims against FRANCHISEE by The COMPANY concerning FRANCHISEE's obligations under Articles 11 or 12 of this Agreement, and (vi) claims against FRANCHISEE by The COMPANY regarding an assignment of this Agreement or any ownership interests therein, any and all claims arising out of or relating to this Agreement or the relationship between the parties will be barred unless an action is commenced within one year from the date FRANCHISEE or The COMPANY knew or should have known of the facts giving rise to such claims.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, claims against a franchisee for injunctive relief relating to financial obligations upon termination or expiration of the Franchise Agreement are exempt from the one-year limitation of claims. This means Gold Star is not restricted to bringing such claims within one year of when it knew or should have known about the facts giving rise to the claim.
This exemption favors Gold Star, allowing them more time to pursue legal action against a franchisee regarding financial obligations after the franchise agreement ends. These financial obligations could include unpaid fees, underreported sales, or other financial liabilities the franchisee owes to Gold Star.
For a prospective franchisee, this means that financial obligations to Gold Star continue even after the franchise agreement terminates, and Gold Star has considerable leeway in pursuing related legal claims. It is important for franchisees to understand all their financial obligations under the agreement and to maintain accurate records to avoid potential disputes.