Does Gold Star define what constitutes a 'company owned' store?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
As of December 31, 2024, there were 48 franchised Restaurants and 9 company-owned Restaurants in operation in the United States. Officers, directors or shareholders of Gold Star and/or their relatives wholly or partly own a substantial number of Franchises. Gold Star defines "company owned" stores as those stores which are controlled by Gold Star directly through equity ownership. Gold Star does not enter into franchise agreements with any of its company owned outlets, but it is currently the practice of Gold Star to cause its company owned outlets to pay the same fees and comply with the same standards and obligations as it requires of its franchisees.
Source: Item 1 — The Franchisor and any Parents, Predecessors, and Affiliates (FDD pages 7–10)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the company defines "company owned" stores as those controlled directly through equity ownership. As of December 31, 2024, Gold Star had 9 company-owned Restaurants in operation, alongside 48 franchised Restaurants.
For a prospective franchisee, this definition clarifies the distinction between franchised and company-operated locations. It means that Gold Star maintains direct financial control over its company-owned stores, influencing operational decisions and financial outcomes. This is a fairly standard practice in the franchise industry, where franchisors often operate company-owned stores to test new products, refine operational procedures, and maintain a direct stake in the brand's performance.
The FDD also states that Gold Star does not enter into franchise agreements with its company-owned outlets, but it is currently their practice to cause its company owned outlets to pay the same fees and comply with the same standards and obligations as it requires of its franchisees. This suggests that while company-owned stores are not technically franchises, they adhere to similar financial and operational requirements, ensuring consistency across the Gold Star system. This can be reassuring for franchisees, as it indicates that company-owned stores are held to the same standards, promoting a level playing field.