What is the consideration for the agreement between Gold Star and the franchisee?

According to the 2025 Gold Star Franchise Disclosure Document, the franchisee provides several forms of consideration to Gold Star in exchange for the franchise license. These include initial franchise fees, continuing franchise fees (royalties), and advertising fees. The franchisee is also required to purchase proprietary chili from Gold Star. Gold Star considers the licensing of the franchising right to be a single performance obligation, so the transaction price is not allocated among these components.

In addition to the monetary considerations, the franchisee must adhere to Gold Star's System Standards. These standards encompass every detail of the System, including ingredients, methods of food preparation and service, and the weight, quality, and dimensions of menu items. The franchisee must operate the business in a manner that preserves and builds the goodwill of all Restaurants and of Gold Star, complying with all System Standards as modified by Gold Star.

The franchisee is also responsible for maintaining and refurbishing the store. The franchisee must repair and paint the interior and exterior of the Retail Location at their own expense and maintain the interior and exterior of the Store, signs, furniture, fixtures, and equipment in a clean and attractive condition. At Gold Star's request, the franchisee will refurbish the Store at their own expense to conform to the trade dress, color schemes, and presentation of the Marks. Gold Star cannot estimate the costs of refurbishment but any request by Gold Star will be in its reasonable discretion.