Can Gold Star condition its approval of a Lease on the inclusion of specific provisions?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
- 4.3 Approval of Lease. If FRANCHISEE intends to occupy the Retail Location under a lease, sublease, or other contract of tenancy (collectively, the "Lease"), any such Lease (and any amendment, renewal or extension thereof) must be approved by the COMPANY prior to its execution. The COMPANY's approval of the Lease may be conditioned upon the inclusion of such provisions as the COMPANY reasonably requires, including without limitation, those provisions set forth on Exhibit B attached hereto.
EXHIBIT B TO FRANCHISE AGREEMENT
LEASE PROVISIONS
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- A provision that restricts the use of the premises solely to the operation of the franchised business;
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- A provision permitting the COMPANY to enter the Retail Location to de-identify the Business without penalty in accordance with Section 14 of this Agreement.
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- A provision requiring the landlord to provide the COMPANY with reasonable advanced notice if there is any contemplated termination and granting the COMPANY a reasonable amount of time, at the COMPANY's option, to avoid such termination (upon any such event, FRANCHISEE shall reimburse the COMPANY for all costs and expenses incurred in connection with such avoidance).
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- A provision that reserves to the COMPANY the right, but not the obligation, to assume FRANCHISEE's leasehold interest, with the right to sublease, upon termination or expiration of the lease or of this Agreement, without any assessment of additional fees, penalties, or rent acceleration; and
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- A provision that modifies the term of the lease so that it is coterminous with this Agreement.
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- A provision that gives the COMPANY the right, but not the obligation, to enter the premises or make modifications necessary to protect the Marks or the System or to cure any default under this Agreement; and
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- A provision that restricts the lease from being modified in a manner that could materially affect the COMPANY's rights with respect to the lease, without the COMPANY's prior written consent.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, Gold Star's approval of a franchisee's lease may be conditional. Specifically, Gold Star can require that certain provisions be included in the lease agreement. These provisions are those that Gold Star reasonably requires. Exhibit B of the Franchise Agreement lists specific lease provisions that Gold Star may require.
Exhibit B outlines several provisions Gold Star might require in the lease. These include restricting the premises' use solely to the franchised business and allowing Gold Star to enter the location to de-identify the business without penalty, as per Section 14 of the agreement. The landlord must also provide Gold Star with advanced notice of any potential termination, giving Gold Star time to avoid it, with the franchisee responsible for reimbursing Gold Star for any related costs.
Additionally, Gold Star may require a provision that allows them to assume the franchisee's leasehold interest upon termination or expiration of the lease or the Franchise Agreement, without additional fees or rent acceleration. The lease term may also need to be coterminous with the Franchise Agreement. Gold Star can also mandate the right to enter the premises to protect their marks or cure any default under the agreement, and restrict lease modifications that could affect Gold Star's rights without their written consent. These stipulations ensure Gold Star maintains control and protects its brand and interests throughout the franchise operation.