Does the Gold Star company need to provide a reason for rejecting a proposed transfer by the franchisee?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
WRITTEN APPROVALS.** Whenever this Agreement requires the COMPANY's prior approval or consent, FRANCHISEE shall make a timely written request therefor, and such approval may be granted or denied by the COMPANY in its discretion.
No approval shall be effective unless given in writing.
The COMPANY makes no warranties, representations, or guarantees upon which FRANCHISEE may rely, and assumes no liability or obligation to FRANCHISEE, by providing any waiver, approval, consent or suggestion to FRANCHISEE in connection with this Agreement, or by reason of any neglect, delay or denial of any request therefor.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, Gold Star has the discretion to deny a transfer request. Specifically, whenever the franchise agreement requires Gold Star's prior approval or consent, the document states that such approval may be granted or denied by Gold Star in its discretion. The agreement also states that no approval shall be effective unless given in writing.
This means that Gold Star is not obligated to provide a reason if they deny a franchisee's request to transfer their franchise. This gives Gold Star significant control over who becomes a franchisee and ensures that all new franchisees meet their standards.
For a prospective franchisee, this highlights the importance of finding a qualified buyer who will likely be approved by Gold Star if they plan to sell their franchise in the future. It also means that Gold Star assumes no liability to the franchisee by denying any request.