What is Gold Star's current practice regarding Franchisee supplier payments and rebate/allowance payments?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
Note 5: You must assign to Gold Star or its designee all product and/or advertising rebates or allowances that are granted to you by certain suppliers, as directed by Gold Star. Currently assignments are required with respect to our soft drinks supplier, with whom Gold Star has negotiated a group purchase arrangement. Although not obligated to do so by the Franchise Agreement or any related agreement, Gold Star's current practice is to have the assigned Franchisee supplier payments made (and to have all of the rebate or allowance payments from those suppliers receivable by Gold Star for company-owned Restaurants made) to GSCAA for use in the Brand Building Fund. Gold Star reserves the right to change this practice at any time without notice to its franchisees.
Note 6: Current terms with our designated suppliers are Net 7 or Net 14, but in instances where payments are late or not made, the supplier may demand cash on delivery.
Source: Item 6 — OTHER FEES (FDD pages 12–18)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, franchisees are required to assign all product and advertising rebates or allowances from specific suppliers to Gold Star or its designee. Currently, this assignment applies to the soft drink supplier, with whom Gold Star has negotiated a group purchasing arrangement.
Gold Star's current practice is to have these assigned franchisee supplier payments, along with rebate or allowance payments from suppliers for company-owned restaurants, directed to GSCAA for use in the Brand Building Fund. GSCAA is Gold Star Chili Advertising Association, an Ohio nonprofit corporation. Gold Star is the sole member of GSCAA, and a majority of GSCAA's current board of trustees are officers, directors, employees or shareholders of Gold Star. The Brand Building Fund does not itself impose fees.
However, Gold Star retains the right to modify this practice at any time without prior notice to franchisees. Franchisees are also responsible for payments to designated suppliers, with current terms being Net 7 or Net 14. Suppliers may demand cash on delivery if payments are late or not made. The Supplier Payment Assignment fee is 100% of product and/or advertising rebates or allowances from certain system-wide suppliers, payable to GSCAA when the Franchise Agreement is signed and is non-refundable.