What is the deadline for a Gold Star franchisee to submit resolutions from the applicable governing body?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
- 17.3 Governance Documents. The partnership agreement, articles of incorporation, articles of organization, operating agreement, bylaws and other organization documents of FRANCHISEE shall recite that the issuance and transfer of any interest therein is restricted by the terms of Section 13 of the Agreement. FRANCHISEE shall also submit to the COMPANY, upon the execution of this Agreement, resolutions from the applicable governing body of FRANCHISEE which authorize the execution, delivery and performance of this Agreement and the transactions contemplated hereby and states, in form and substance, that no shares or other interest in FRANCHISEE shall be issued, transferred or assigned to any person or legal entity except according to the terms of this Agreement.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, if the franchisee is a legal entity like a partnership, corporation, or LLC, they must provide resolutions from their governing body to Gold Star. These resolutions must authorize the execution, delivery, and performance of the Franchise Agreement.
Specifically, the resolutions need to state that no shares or interests in the franchisee entity will be issued, transferred, or assigned to anyone except as allowed by the terms of the Franchise Agreement. This requirement ensures that Gold Star maintains control over who becomes a franchisee and that transfers of ownership comply with the agreement.
The deadline for submitting these resolutions is upon the execution of the Franchise Agreement. This means that the franchisee must provide these documents at the same time they sign the agreement, ensuring that Gold Star has the necessary assurances about the franchisee's legal structure and ownership before the agreement becomes effective. This is a fairly standard practice in franchising, as franchisors need to verify the legal standing of their franchisees.
This requirement is important for prospective Gold Star franchisees who plan to operate under a business entity. They should ensure that their partnership agreement, articles of incorporation, operating agreement, or bylaws include restrictions on the transfer of ownership interests, as mandated by Section 13 of the Franchise Agreement. Furthermore, they must prepare the necessary resolutions from their governing body in advance to meet the deadline upon signing the Franchise Agreement.