What costs is Gold Star not liable for if a franchisee fails to cooperate?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 6.7 notwithstanding, if FRANCHISEE fails to meet its obligations under Sections 6.8 and 6.9 with respect to any particular event, the COMPANY's warranties and obligations under Sections 6.7 and 6.8 shall become void with respect to such particular event, and the COMPANY shall have no liability for costs incurred or damages awarded against FRANCHISEE. EXCEPT AS SPECIFICALLY SET FORTH IN SECTION 6.8, ABOVE, THE COMPANY SHALL NOT BE LIABLE TO FRANCHISEE FOR ANY DAMAGES, COSTS, OR EXPENSES WHATSOEVER, INCLUDING BUT NOT LIMITED TO, ANY LOSS OF PROFITS OR BUSINESS OPPORTUNITIES, OR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND WHATSOEVER RELATING TO ANY ACTION OR OTHER MATTER INVOLVING THE MARKS OR GOODWILL ASSOCIATED THEREWITH.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, if a franchisee fails to meet their obligations regarding specific events, Gold Star's warranties and obligations become void for that particular event. Specifically, Gold Star will not be liable for costs incurred or damages awarded against the franchisee.
Furthermore, Gold Star is not liable to the franchisee for any damages, costs, or expenses, including loss of profits or business opportunities, or incidental or consequential damages relating to any action or matter involving the marks or goodwill associated with Gold Star. This means that if a franchisee's failure to cooperate leads to financial losses or legal issues, Gold Star will not be responsible for covering those costs, except as specifically outlined in Section 6.8 of the franchise agreement.
This lack of liability underscores the importance of franchisees fully understanding and adhering to their obligations under the franchise agreement. Failure to do so can expose the franchisee to significant financial risks, as they will be solely responsible for any resulting costs or damages. Prospective franchisees should carefully review Sections 6.8 and 6.9 of the franchise agreement to understand the specific obligations and the potential consequences of non-compliance.