How is the continuing brand building fee for a Gold Star franchise calculated?
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 the 2025 Gold Star Franchise Disclosure Document, the continuing brand building fee is based on a percentage of Gross Sales, as specified on the cover page of the FDD. This fee, referred to as the "Brand Building Fee," can be adjusted by Gold Star at its discretion. However, the increase cannot exceed seven percent of the franchisee's Gross Sales in any calendar year without the franchisee's written consent. Furthermore, the Brand Building Fee will not be increased by more than 1% in any 12-month period.
The Brand Building Fee is payable by the franchisee to Gold Star (or its designee) for the Brand Building Fund on or before Tuesday of each week. This payment is based on the Gross Sales for the preceding week, which ends on Sunday. The payment is facilitated through a preauthorized debit arrangement. Gold Star or a designated third-party supplier obtains the franchisee's weekly sales information directly from the franchisee's POS system each week. If this is not possible, the franchisee must provide the sales report to Gold Star by Thursday.
Franchisees should note that all Brand Building Fees are nonrefundable. The Brand Building Fund is used for marketing purposes, and Gold Star has sole discretion over the advertising strategies and allocation of the fund. While the fund is intended to be perpetual, Gold Star can terminate or suspend its operation at any time, ensuring that all monies are expended before termination. If the Brand Building Fund is suspended or terminated, or if the required Brand Building Fee percentage is less than seven percent, Gold Star may increase the Local Marketing Expenditure up to seven percent of the franchisee's Gross Sales, but the total of the Local Marketing Expenditure and Brand Building Fees cannot exceed seven percent of Gross Sales in any calendar year.