What is the definition of 'Lease' in the context of a Gold Star franchise?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
LEASE PROVISIONS
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- A provision that restricts the use of the premises solely to the operation of the franchised business;
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- A provision permitting the COMPANY to enter the Retail Location to de-identify the Business without penalty in accordance with Section 14 of this Agreement.
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- A provision requiring the landlord to provide the COMPANY with reasonable advanced notice if there is any contemplated termination and granting the COMPANY a reasonable amount of time, at the COMPANY's option, to avoid such termination (upon any such event, FRANCHISEE shall reimburse the COMPANY for all costs and expenses incurred in connection with such avoidance).
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- A provision that reserves to the COMPANY the right, but not the obligation, to assume FRANCHISEE's leasehold interest, with the right to sublease, upon termination or expiration of the lease or of this Agreement, without any assessment of additional fees, penalties, or rent acceleration; and
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- A provision that modifies the term of the lease so that it is coterminous with this Agreement.
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- A provision that gives the COMPANY the right, but not the obligation, to enter the premises or make modifications necessary to protect the Marks or the System or to cure any default under this Agreement; and
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- A provision that restricts the lease from being modified in a manner that could materially affect the COMPANY's rights with respect to the lease, without the COMPANY's prior written consent.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the lease agreement for a franchised location must include specific provisions to protect Gold Star's interests. These provisions ensure that the premises are used solely for the Gold Star business and allow Gold Star to de-identify the location if necessary, without penalty.
The lease must also require the landlord to provide Gold Star with advanced notice of any potential termination, giving Gold Star the option to prevent the termination, with the franchisee responsible for covering any associated costs. Furthermore, Gold Star reserves the right, but not the obligation, to assume the franchisee's leasehold interest upon termination or expiration of the lease or franchise agreement, including the right to sublease the property without additional fees or rent acceleration.
Additionally, the lease term must be coterminous with the franchise agreement, meaning they end at the same time. Gold Star has the right, but not the obligation, to enter the premises and make necessary modifications to protect its trademarks or the franchise system, or to address any defaults under the franchise agreement. Finally, the lease cannot be modified in any way that could materially affect Gold Star's rights without their prior written consent.
These lease provisions are designed to safeguard Gold Star's brand and operational control, ensuring uniformity and protecting their investment in the franchise network. Prospective franchisees should carefully review these requirements with their legal counsel to fully understand their obligations and the potential implications for their business.