What constitutes a 'complete and effective wind-down and de-identification of the Business' for a terminated Gold Star franchise?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
- 15.1 De-Identification; Wind-Down of Business. Upon the termination or expiration of this Agreement, or upon the permanent closing or abandonment of the Store or the Business, the following provisions shall apply:
- 15.1.1 All rights, privileges and licenses granted by the COMPANY to FRANCHISEE will immediately cease, be null and void, and of no further force and effect, and all such privileges and licenses will immediately revert to the COMPANY.
- 15.1.2 FRANCHISEE shall immediately discontinue the use of the System and the Marks. All rights granted herein with respect to the Marks and System shall thereupon be deemed canceled and terminated.
- 15.1.3 Unless FRANCHISEE receives written notice of the COMPANY's exercise of its options set forth in Section 15.2 below, after thirty (30) days have elapsed since the effective date of termination, FRANCHISEE shall immediately remove the Marks from all buildings, signs, fixtures and furnishings, and within thirty (30) days' after written notice from the COMPANY, alter and paint all structures and other improvements maintained pursuant to this Agreement a design and color which is basically different from the COMPANY's authorized building design and painting schedule and otherwise assist COMPANY in every way possible to bring about a complete and effective wind-down and de-identification of the Business. If FRANCHISEE shall fail to make or cause to be made any such removal, alteration or repainting, then the COMPANY shall have the right to enter upon the Retail Location, without being deemed guilty of trespass or any other tort or civil wrong, and make or cause to be made such removal, alterations and repainting at the reasonable expense of FRANCHISEE, which expense FRANCHISEE shall pay the COMPANY upon demand. FRANCHISEE shall not be deemed to have waived any rights which FRANCHISEE may have under any Franchise Law by reason
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to the 2025 Gold Star Franchise Disclosure Document, a 'complete and effective wind-down and de-identification of the Business' involves several steps that a franchisee must take upon termination or expiration of the franchise agreement, or upon permanent closure of the store. All rights and licenses granted to the franchisee by Gold Star immediately cease and revert back to Gold Star. The franchisee must immediately stop using the Gold Star system and trademarks.
Within thirty days after the termination date, the franchisee is required to remove all Gold Star trademarks from the buildings, signs, fixtures, and furnishings. Additionally, within thirty days of receiving written notice from Gold Star, the franchisee must alter and repaint the structures to a design and color that is distinctly different from Gold Star's authorized design and color scheme. The franchisee is expected to assist Gold Star in every way possible to ensure a complete and effective wind-down and de-identification of the business.
If the franchisee fails to perform these actions, Gold Star has the right to enter the retail location and make the necessary removals, alterations, and repainting at the franchisee's expense. The franchisee is responsible for paying these expenses to Gold Star upon demand. This ensures that the location no longer represents a Gold Star restaurant and prevents any confusion for customers.
This process is crucial for protecting Gold Star's brand and reputation, as it ensures that terminated or closed locations do not continue to operate under the Gold Star name or system. For a prospective franchisee, it's important to understand these obligations to avoid potential costs associated with Gold Star having to perform the de-identification process themselves.