What is the dependency between the manual and the records a Gold Star franchisee must keep?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
he requirements set forth in Section 9.2.1 above to Gold Star's satisfaction, Gold Star may, at its option, pay an additional contribution from the Brand Building Fund toward grand opening advertising and support.
- 9.5 Company's Assignment Right. The COMPANY shall have the right to delegate its responsibilities and duties under this Section 9 to any designee of its choosing; provided, however, that the right of final approval of all advertising shall be retained at all times by the COMPANY.
10. BOOKS AND RECORDS.
10.1 Maintenance of Records. FRANCHISEE shall maintain true and accurate records, accounts, books and data including but not limited to, sales slips, cash register tapes, cash register tape readings, cash and other return records, sales books, bank books, duplicate deposit slips, inventories, tax returns, financial statements, reports to government authorities, Store records and other evidence of gross revenues and business transactions as required by the COMPANY in the Manual or otherwise in writing (collectively, the "Business Records"), which shall accurately reflect all particulars relating to the Business and which shall be prepared in accordance with generally accepted accounting principles. FRANCHISEE shall submit to the COMPANY within (20) days after the end of each calendar quarter, a balance sheet and profit and loss statement for the calendar quarter most recently ended (with year to date totals), in such form as the COMPANY may require in the Manual or otherwise in writing, certified as true, correct and complete and prepared in accordance with generally accepted accounting principles consistently applied by an accountant acceptable to the COMPANY. In the event FRANCHISEE fails to deliver to COMPANY the information required in the immediately preceding sentence for any month within said 20-day period, it shall be subject to an administrative charge of One Hundred Dollars ($100.00) for each such month it fails to do so. Entitlement to such charge shall be in addition to the COMPANY's right to terminate this Agreement and
any other remedies the COMPANY may have with respect to such late payment. FRANCHISEE shall submit to the COMPANY such other information and reports concerning the Business in such form as the COMPANY may from time to time prescribe in the Manual or otherwise in writing.
- 10.2 Company's Audit Rights. The COMPANY, its agents or representatives, may examine and audit the Business Records at all reasonable times. The COMPANY also shall have the right, at its sole cost and expense, except as hereinafter provided, to have a certified public accountant designated by the COMPANY audit the Business Records.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, franchisees are required to maintain specific business records as dictated by the brand's manual or other written communication. These records encompass a wide array of documents, including sales slips, cash register tapes, bank books, deposit slips, inventories, tax returns, financial statements, and reports to governmental bodies. The purpose of maintaining these records is to accurately reflect all aspects of the business's operations and financial transactions, adhering to generally accepted accounting principles.
Gold Star requires franchisees to submit quarterly financial reports, including a balance sheet and profit and loss statement, within 20 days after each calendar quarter's end. These statements must be certified as accurate and prepared by an accountant acceptable to Gold Star. Failure to provide these reports on time results in an administrative charge of $100 per month, in addition to Gold Star's right to terminate the franchise agreement or pursue other legal remedies.
Furthermore, franchisees must provide other information and reports about the business as specified in the manual or in writing by Gold Star. The company retains the right to audit these business records at any reasonable time, and if an audit reveals an understatement of gross sales by 2% or more for any reporting period, the franchisee is responsible for covering the costs of the audit, including accountant fees. All business records must be preserved for a minimum of five years, or longer if required by law. Franchisees must also supply monthly sales reports, interim financial statements, tax return copies, and any other requested business records within 15 days of the company's request.