What defines a 'Transferred Restaurant' for Gold Star franchise fee purposes?

According to Gold Star's 2025 Franchise Disclosure Document, a 'Transferred Restaurant' is defined as a restaurant operating from a location where a Gold Star Chili restaurant was in operation at any point during the six months immediately prior. This definition is important because it affects the initial franchise fee a new franchisee will pay.

Specifically, if a franchisee is opening a 'Transferred Restaurant,' the initial franchise fee is the lesser of either $25,000 or the fee that would be required for a 'New Restaurant'. The fee for a 'New Restaurant' varies depending on how many existing Gold Star franchise agreements the franchisee already has with the company. For instance, if the franchisee is opening a 'New Restaurant' and doesn't already have any existing franchise agreements with Gold Star, the initial franchise fee is $50,000. If they have between one and four existing agreements, the fee is $25,000, and if they have five or more, it's $10,000.

Therefore, understanding whether a location qualifies as a 'Transferred Restaurant' is crucial for prospective franchisees, as it can significantly impact the initial investment required. If a franchisee is taking over an existing Gold Star location that has been operating within the last six months, they could potentially pay a lower initial franchise fee compared to opening a completely new location. This could make taking over an existing location a more financially attractive option, depending on the specific circumstances and the number of existing franchise agreements the franchisee has with Gold Star.