Does the Gold Star company have sole discretion in determining actions to protect the Marks?

According to Gold Star's 2025 Franchise Disclosure Document, Gold Star retains significant authority regarding the protection of its trademarks. The document states that Gold Star agrees to take actions it deems reasonably necessary to protect the marks and associated goodwill. Gold Star has the exclusive right, in its sole discretion exercised in good faith, to determine and undertake actions it deems appropriate to prevent trademark infringement or the diminution of goodwill in the marks. This indicates that Gold Star has the power to decide what actions are necessary to safeguard its brand.

However, the franchisee also has responsibilities related to trademark protection. Franchisees must promptly notify Gold Star in writing of any potential infringement of the marks or any claims made against the franchisee involving the marks. If a third party initiates legal action against the franchisee challenging their right to use the marks, Gold Star may, at its sole discretion, assume the defense of the franchisee.

If Gold Star takes on the defense, the franchisee must cooperate fully with Gold Star's counsel and allow Gold Star to retain ultimate control over the legal strategy. While franchisees can retain their own legal counsel, Gold Star is not responsible for those costs. If a franchisee fails to meet their obligations regarding notice of infringement and cooperation, Gold Star's warranties and obligations become void, and Gold Star will not be liable for costs or damages incurred by the franchisee.

In summary, while Gold Star retains sole discretion in determining actions to protect its marks, franchisees have a duty to report potential infringements and cooperate in any legal defense undertaken by Gold Star. Franchisees should be aware of their obligations and the potential consequences of failing to meet them.