What is the definition of a 'Principal' according to the Gold Star FDD?

According to Gold Star's 2025 Franchise Disclosure Document, if the franchisee is a corporation, limited liability company, or partnership, a 'Principal' must either serve as the Store Manager or, if another individual is the Store Manager, a 'Principal' must be present and actively participate in the store's operations for at least 10% of its operating hours on a weekly basis. Alternatively, the Manager can be an owner with at least a 10% interest in the franchisee entity.

This definition is important because it outlines the required level of involvement from the owners or principals of the franchise entity. Gold Star wants to ensure that someone with a significant stake in the business is actively involved in its operation, either as the Store Manager or through regular participation. This requirement helps maintain quality control and ensures that the franchise is managed in accordance with Gold Star's standards.

For a prospective franchisee, this means that if you are planning to own the Gold Star franchise through a corporation, LLC, or partnership, you must either designate a principal to manage the store or ensure that a principal spends a minimum amount of time (10% of operating hours) actively involved in the store's operations. If neither of these options is feasible, the designated manager must hold at least a 10% ownership stake in the franchise entity. This requirement should be carefully considered when structuring the ownership and management of the franchise.