What is the condition under which the Brand Building Fund shall not be terminated for Gold Star franchisees?

According to Gold Star's 2025 Franchise Disclosure Document, the Brand Building Fund, while intended to be perpetual, may be terminated or suspended by Gold Star at any time. However, a key condition exists: the Brand Building Fund cannot be terminated until all monies within the fund have been fully expended according to Section 9.3.5 of the FDD.

Section 9.3.5 specifies that all contributions to and earnings of the Brand Building Fund are anticipated to be spent during the taxable year in which they are received. This means expenditures should first be made from earnings of the fund from previous years, then from current year earnings, and finally from contributions. This stipulation ensures that franchisees' contributions are used for their intended purpose before the fund can be dissolved.

If the Brand Building Fund is suspended or terminated, or if the required Brand Building Fee percentage is less than seven percent, Gold Star has the option to increase the Local Marketing Expenditure up to seven percent of the franchisee's Gross Sales. However, the combined total of the Local Marketing Expenditure and any required Brand Building Fees cannot exceed seven percent of the franchisee's Gross Sales in any calendar year. This provision ensures that franchisees' overall marketing expenditure requirements remain capped even if the Brand Building Fund is altered or discontinued.