Who are the defendants in the lawsuit involving the Gold Star franchise?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
igation**
Pending Item:
Gold Star Chili, Inc. and GSC Properties, LLC v. 21 Partners Group LLC and Rasem Daoud. Gold Star and GSC Properties filed a complaint against 21 Partners Group LLC, an existing franchisee, and Rasem Daoud, its owner, on June 14, 2024. On June 9, 2017, the
defendants executed a Lease Agreement with GSC Properties and a Franchise Agreement with Gold Star pursuant to which defendants operated a franchise (the "Hartwell Gold Star") at 21 East Galbraith Road, Cincinnati, Ohio 45216 (the "Property").
On October 9, 2021, there was a fire at the Property that resulted in a total loss of the Hartwell Gold Star. After the fire, the defendants ceased operating, never rebuilt, and retained insurance proceeds which were to be used to rebuild, the Hartwell Gold Star. Defendant 21 Partners was issued a check for $157,990.41 for replacement of furniture, fixtures, and equipment, but never provided Gold Star with these proceeds, despite having a contractual obligation to do so. Defendant 21 Partners provided Gold Star with building replacement insurance proceeds totaling $455,642.92, but the total cost for restoration is $1,106,670.00, a cost for which defendants are responsible.
The lawsuit was initiated in order to resolve these issues and is currently in the discovery phase.
Source: Item 3 — Litigation (FDD pages 10–11)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, Gold Star Chili, Inc. and GSC Properties, LLC filed a complaint against 21 Partners Group LLC and Rasem Daoud on June 14, 2024. 21 Partners Group LLC was an existing franchisee, and Rasem Daoud is its owner. The lawsuit is related to a fire that occurred on October 9, 2021, at the Hartwell Gold Star location operated by the defendants, which resulted in a total loss.
Following the fire, the defendants allegedly ceased operations without rebuilding the location and retained insurance proceeds that were intended for the rebuild. Specifically, 21 Partners was issued a check for $157,990.41 for replacement of furniture, fixtures, and equipment but allegedly did not provide these proceeds to Gold Star, despite a contractual obligation to do so. Additionally, 21 Partners provided Gold Star with building replacement insurance proceeds totaling $455,642.92, while the total cost for restoration is $1,106,670.00, a cost for which Gold Star alleges the defendants are responsible.
The lawsuit was initiated to resolve these issues and is currently in the discovery phase. This type of litigation is not uncommon in franchising when disputes arise over contractual obligations, insurance proceeds, or property restoration after unforeseen events. Prospective franchisees should be aware of the potential for such disputes and carefully review the terms of the franchise agreement regarding insurance, property maintenance, and obligations in the event of property damage or loss.