Does the Gold Star company have sole discretion over Brand Building Fund advertising?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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. FRANCHISEE agrees and acknowledges that the Brand Building Fund advertising is intended to maximize general public recognition and acceptance of the Marks, Proprietary Products and System and that the COMPANY and its designee undertake no obligation, in
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, Gold Star, or its designee, has sole discretion over the Brand Building Fund advertising. Specifically, Gold Star has the authority to determine, approve, or disapprove the creative concepts, materials, and media used in such advertising, as well as the placement, type, scope, and allocation of the Brand Building Fund advertising.
This means that franchisees do not have direct control over how the Brand Building Fund is spent on advertising. Gold Star's advertising is intended to maximize general public recognition and acceptance of the brand's trademarks, proprietary products, and overall system. Gold Star does not have an obligation to ensure that any particular franchisee benefits directly or proportionally from the advertising or promotion conducted under the Brand Building Fund.
Franchisees are required to participate in the Brand Building Fund as directed by Gold Star. Subject to written instructions from Gold Star, franchisees must 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 Gold Star is the only member. This arrangement centralizes advertising decisions and spending with Gold Star, which is a common practice in franchising to maintain brand consistency and maximize marketing impact.