Does the Gold Star company have the right to an accounting incident to collecting unpaid franchise fees?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
- 27. EXPENSES. If the COMPANY incurs any costs or expenses (including but not limited to attorneys' fees, court costs, other litigation expenses, settlement expenses or other expenses of any kind) in enforcing or protecting the COMPANY's rights under this Agreement, or any judgments, orders or awards relating thereto, or in preparation for or investigation or contemplation thereof, the COMPANY shall be entitled to recover from FRANCHISEE all such costs and expenses on demand, with interest from the date due pursuant to Section 8.3, above.
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 right to recover costs and expenses, including attorney's fees and court costs, if they incur them while enforcing their rights under the franchise agreement. This includes any judgments, orders, or awards related to enforcing the agreement, as well as expenses for investigation or preparation.
This means that if a Gold Star franchisee fails to pay fees or otherwise breaches the franchise agreement, and Gold Star has to take legal action to enforce its rights, the franchisee will be responsible for covering Gold Star's legal expenses. These expenses also accrue interest from the date they are due, as per Section 8.3 of the agreement.
For a prospective Gold Star franchisee, this highlights the importance of complying with the franchise agreement and paying fees on time. Failure to do so could result in not only the original unpaid fees but also significant additional legal costs. This clause is a standard inclusion in franchise agreements to protect the franchisor's interests and ensure franchisees adhere to the terms of the agreement.