Does the Gold Star company guarantee any specific outcome from the Brand Building Fund advertising?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
s to the COMPANY upon request.
- 9.3 Brand Building Fund. FRANCHISEE shall participate in the COMPANY's marketing fund (the "Brand Building Fund") as the COMPANY shall direct. Subject to written instructions from the COMPANY, FRANCHISEE shall pay all or a portion of the Brand Building Fee directly to the Brand Building Fund. The Brand Building Fund is currently administered by the Gold Star Chili Advertising Association, an Ohio nonprofit corporation, of which the COMPANY is the only member.
- 9.3.1 The COMPANY, or its designee, shall oversee all Brand Building Fund advertising, with sole discretion to determine, approve or disapprove the creative concepts, materials and media used in such advertising, and the placement, type, scope and allocation of the Brand Building Fund advertising.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, Gold Star does not guarantee any specific outcome related to the Brand Building Fund advertising. Gold Star has sole discretion in determining the advertising's creative concepts, materials, media, placement, type, scope, and allocation. Gold Star states that the Brand Building Fund advertising is intended to maximize general public recognition and acceptance of the brand's marks, products, and system.
Gold Star explicitly states that neither the company nor its designees are obligated to ensure that any particular franchisee benefits directly or proportionally from the advertising or promotion conducted through the Brand Building Fund. This means that while franchisees are required to contribute to the fund, there is no assurance that the advertising efforts will directly benefit their specific location or market.
This lack of guarantee is a common practice in franchising, as advertising effectiveness can vary based on numerous factors, including market conditions, local competition, and consumer preferences. Prospective franchisees should recognize that their contributions to the Brand Building Fund may not always result in immediate or measurable benefits for their individual business. It is important for franchisees to understand that the fund is intended for the overall benefit of the Gold Star brand, and individual results may vary.