What claims against a Gold Star franchisee are 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, there are several types of claims that are exempt from the standard one-year limitation period for legal actions. This means that Gold Star can pursue these claims against a franchisee even if more than one year has passed since the facts giving rise to the claim became known or should have been known.
Specifically, the exemptions include claims regarding the underreporting of Gross Sales and the corresponding underpayment of continuing franchise and Brand Building Fees. This is significant because it allows Gold Star to address potential revenue discrepancies without being strictly bound by a short statute of limitations. Additionally, claims relating to third-party actions or suits brought against Gold Star as a result of the franchisee's store operations are also exempt. This protects Gold Star from liabilities arising from a franchisee's actions, regardless of when those liabilities are discovered.
Further exemptions apply to claims for injunctive relief to enforce provisions related to the franchisee's use of Gold Star's Marks, as well as claims for injunctive relief related to the franchisee's financial obligations upon termination or expiration of the franchise agreement. Claims concerning the franchisee's obligations under Articles 11 or 12 of the agreement, and claims regarding any assignment of the agreement or ownership interests, are also not subject to the one-year limitation. These exemptions provide Gold Star with extended legal recourse to protect its brand, financial interests, and the integrity of its franchise system.