What is the cost threshold that triggers the extended refurbishment deadline for a Gold Star franchise?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
products is recognized in the period in which distributors ship the order; recognition of revenue (point in time) results in accounts receivable on the consolidated balance sheets.
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
In determining the amount and timing of revenue from contracts with customers, the Company exercises significant judgment with respect to collectability of the amount. However, the timing of recognition does not require significant judgments as it is based on either the franchise term or the mo
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to the 2025 Gold Star Franchise Disclosure Document, the company offers a Development Incentive Program to franchisees for rebranding. Depending on the package and royalty incentive level selected, Gold Star will provide a reduction in royalty fees of 1% to 3% depending on the rebranding package or a cash contribution of 10% up to $25,000 of remodeling costs.
For a prospective franchisee, this means that if they choose the cash contribution option, Gold Star will contribute up to $25,000 towards the remodeling costs. This contribution is structured as a contract asset that is amortized over 12-18 months and netted against the franchisee's royalty fees.
This incentive can significantly reduce the initial financial burden of remodeling, making it more attractive for franchisees to rebrand their locations. However, the franchisee needs to consider that the cash contribution is capped at $25,000 and only covers 10% of the remodeling cost, meaning they are responsible for the remaining expenses. Additionally, the benefit is realized over time through reduced royalty fees rather than an immediate cash payment.