Does Gold Star establish and maintain Brand Building funds for advertising and promotion?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
s of your operations at the franchised Restaurant (Sections 5.7 and 5.8 of the Franchise Agreement).
- 3. Establish and maintain, in our discretion, Brand Building funds for regional or national advertising and promotion of the System (Section 9.3 of the Franchise Agreement).
Advertising; Our Brand Building Fund.
Gold Star is not obligated by the Franchise Agreement to conduct any advertising for your franchised Restaurant or any other franchised Restaurant. We have nevertheless established the Brand Building Fund, the purpose of which is to conduct advertising and other marketing activities which promote Gold Star's business, products and services under the Marks. Gold Star reserves the right to establish additional advertising funds in addition to the Brand Building Fund, and may change, merge or dissolve the Brand Building Fund and any other future advertising fund in Gold Star's sole discretion. If Gold Star does establish additional advertising funds, Gold Star may require you to pay all or a portion of Brand Building Fees to such fund in accordance with the provisions below.
Brand Building Fees collected from you and other Franchisees are currently used in the Brand Building Fund supervised by Gold Star or its designee, currently GSCAA (see Note 3 to Item 6 of this disclosure document).
The Brand Building Fund may disseminate advertising through various media, including print, radio, television, billboards, newspaper and digitally via e-mail and internet advertising. Media coverage may be local, regional or national in scope, all in the discretion of Gold Star or its designee. During the fiscal year ended December 31, 2024, media coverage was typically local in scope and limited to the Greater Cincinnati DMA. In Gold Star's discretion, smaller scale marketing programs, based on the amount of Brand Building Fees generated may be implemented in other selected geographical areas. Currently, such smaller scale marketing programs have been implemented in Lexington, and Somerset Kentucky. Gold Star (and its designee) has complete discretion regarding the Brand Building Fund. Gold Star is not obligated to spend any amount on
advertising in the area or territory where you are located. Neither Gold Star nor GSCAA is under any obligation to make expenditures of collected Brand Building Fees in any particular geographic area or for you or any other particular Franchisee, or to ensure that you or any other particular Franchisee benefits directly or on a pro rata basis from the Brand Building Fund.
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 26–36)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, Gold Star establishes and maintains Brand Building Funds for regional or national advertising and promotion of the Gold Star system, though they are not obligated to do so. Franchisees are required to participate in the Brand Building Fund and any future advertising programs that Gold Star requires.
Franchisees must pay Brand Building Fees equal to up to 7% of weekly Gross Sales, with the fee not increasing by more than 1% in a 12-month period. Franchisees operating Special Purpose Outlets typically pay Brand Building Fees of 1% less than Traditional Outlets. These fees are due weekly by Tuesday for the week ended the immediately prior Sunday and are typically paid via a preauthorized debit arrangement. If the Brand Building Fund is suspended or terminated, or if the required Brand Building Fee percentage is less than 7%, Gold Star has the right to require franchisees to spend directly on local advertising and promotion, up to 7% of Gross Sales in any calendar year when aggregated with any Brand Building Fees required.
Brand Building Fees collected from franchisees are used in the Brand Building Fund, which is supervised by Gold Star or its designee, currently GSCAA. The fund may disseminate advertising through various media, including print, radio, television, billboards, newspaper, and digitally via e-mail and internet advertising. Media coverage may be local, regional, or national in scope, at the discretion of Gold Star or its designee. For the fiscal year ended December 31, 2024, media coverage was typically local in scope and limited to the Greater Cincinnati DMA.
In addition to Brand Building Fees, franchisees must spend at least $10,000 on grand opening advertising and promotion within 3 months after opening, which is subject to increase at Gold Star's discretion. When franchisees spend the required amount and comply with the Franchise Agreement, Gold Star's current practice is to spend $5,000 from the Brand Building Fund to provide additional grand opening advertising and support.