What is the continuing brand building fee for a Gold Star franchise based on?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
- 8.1.8 A continuing brand building fee, based on Gross Sales, in the amount of the Percentage Brand Building Fee set forth on the cover page hereof (the "Brand Building Fee"), subject to increase or decrease by the COMPANY in its sole discretion (but not to exceed, in any calendar year, seven percent (7%) of FRANCHISEE's Gross Sales for such year without the written consent of FRANCHISEE).
The Brand Building Fee will not be increased by more than 1% in any 12-month period.
All Brand Building Fees are nonrefundable.
Unless otherwise required in the Manual or pursuant to Section 8.3 below, the Brand Building Fee shall be payable by FRANCHISEE to the COMPANY (or the COMPANY's designee) for the COMPANY's Brand Building Fund (as defined in Section 9.3)) on or before Tuesday of each week based on the Gross Sales for the preceding week ending on Sunday pursuant to the preauthorized debit arrangement described in Section 8.2, below.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the continuing brand building fee is based on Gross Sales. The amount of the Brand Building Fee is specified as a percentage on the cover page of the FDD. Gold Star has the discretion to increase or decrease this fee, but it cannot exceed seven percent of the franchisee's Gross Sales in any calendar year without the franchisee's written consent. Furthermore, any increase to the Brand Building Fee cannot exceed 1% within a 12-month period.
The Brand Building Fees are nonrefundable and are typically payable to Gold Star (or their designee) for the Brand Building Fund on or before Tuesday of each week. This payment is based on the Gross Sales from the preceding week, which ends on Sunday. The payments are facilitated through a preauthorized debit arrangement.
This fee contributes to the Brand Building Fund, which Gold Star uses for marketing and advertising initiatives. While the fund is intended to be perpetual, Gold Star can terminate or suspend it, ensuring that all monies are expended before termination. Franchisees can request an annual report detailing the use and application of the Brand Building Fund. If the Brand Building Fund is suspended or terminated, or if the required Brand Building Fee percentage is less than 7%, Gold Star may increase the Local Marketing Expenditure up to 7% of the franchisee's Gross Sales, but the combined total of the Local Marketing Expenditure and Brand Building Fees cannot exceed 7% of Gross Sales in any calendar year.