What documentation must a Gold Star franchisee submit to the company before consummating a transfer to a third party?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
Before consummation of a Transfer to any third party, FRANCHISEE shall submit a copy of all Transfer documentation (signed by the parties, but expressly subject to the COMPANY's right of first refusal) to the COMPANY at least thirty (30) days in advance of any proposed consummation or closing date for the COMPANY's review and comparison with the offer previously submitted to it. If there has been a change or changes in the Transfer terms and the COMPANY considers such change or changes material, the COMPANY shall again have the right of first refusal herein provided. The COMPANY's right of first refusal shall be unrestricted and absolute, and the COMPANY shall in all cases have thirty (30) days to consider and act on each offer or any change in terms and conditions of offer. Nothing contained in this Section shall in any way be deemed to impair the COMPANY's discretion in considering, approving or disapproving any request to Transfer or to consent to a Transfer.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, before a franchisee can finalize a transfer of their franchise to a third party, they must provide Gold Star with a copy of all transfer documentation. This documentation must be signed by all parties involved in the transfer, but it remains expressly subject to Gold Star's right of first refusal. The franchisee must submit these documents to Gold Star at least thirty days before the proposed closing date. This advance submission allows Gold Star to review the terms and compare them to any previous offers made to the company.
If Gold Star finds any changes in the transfer terms that it considers material, the company retains the right of first refusal. Gold Star has an unrestricted and absolute right of first refusal, with thirty days to consider and act on each offer or any changes to the offer's terms and conditions. This process ensures that Gold Star has ample opportunity to assess the proposed transfer and protect its interests.
This requirement is typical in franchising, as it allows the franchisor to maintain control over who joins their system. By requiring the franchisee to submit all transfer documents well in advance, Gold Star can thoroughly evaluate the proposed transferee and ensure they meet the company's standards and qualifications. This helps maintain brand consistency and protect the overall integrity of the Gold Star franchise system.