In the event of a default, does Gold Star have the right to terminate the agreement, in addition to other remedies?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
he purchase of assets under Section 15.2 above.
- 15.4 No Right to Use Marks. As agreed to in Section 6 of this Agreement, all rights to any Marks, patents and copyrights licensed hereunder belong to the COMPANY exclusively, and upon expiration or termination of this Agreement, the COMPANY may, if FRANCHISEE does not do so, execute in FRANCHISEE's name, at FRANCHISEE's expense and on FRANCHISEE's behalf any and all documents necessary to end and cause the discontinuance immediately of FRANCHISEE's use of or right to use the Marks, patents and copyrights and the COMPANY is hereby irrevocably appointed and designated as FRANCHISEE's attorney-in-fact to do so.
- 15.5 Right of Entry; Appointment of Receiver. If FRANCHISEE is in default under the terms of this Agreement, in addition to the COMPANY's right to terminate this Agreement, and without limiting any other rights or remedies to which the COMPANY may be entitled at law or in equity, the COMPANY will have the right to take any of the following actions:
- 15.5.1 enter upon the premises of the Franchised Restaurant and exercise complete authority with respect to the operation of the Store until such time as the COMPANY determines, in its sole discretion, that FRANCHISEE has cured the default and that there is compliance with the terms of this Agreement; and FRANCHISEE agrees that a designated representative of the COMPANY may operate and control the Store, and that FRANCHISEE will pay the COMPANY for its labor costs, travel expenses, lodging and other expenses reasonably incurred by the - COMPANY in sending a representative to enforce compliance with the terms of this Agreement; or
- 15.5.2 petition any court of competent jurisdiction to appoint a receiver for the business or assets of FRANCHISEE, and FRANCHISEE agrees that it will not contest any proceeding or petition for the appointment of a receiver.
- 15.6 Liquidated Damages.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, Gold Star has the right to terminate the franchise agreement in the event of a default, in addition to other remedies. Specifically, if a franchisee is in default, Gold Star has the right to terminate the agreement, and without limiting any other rights or remedies to which Gold Star may be entitled at law or in equity, Gold Star will have the right to take action.
Gold Star can enter upon the premises of the Franchised Restaurant and exercise complete authority with respect to the operation of the Store until such time as Gold Star determines, in its sole discretion, that FRANCHISEE has cured the default and that there is compliance with the terms of this Agreement. A designated representative of Gold Star may operate and control the Store, and the franchisee will pay Gold Star for its labor costs, travel expenses, lodging and other expenses reasonably incurred by Gold Star in sending a representative to enforce compliance with the terms of this Agreement.
Gold Star can also petition any court of competent jurisdiction to appoint a receiver for the business or assets of the franchisee, and the franchisee agrees that it will not contest any proceeding or petition for the appointment of a receiver. The FDD also states that the occurrence of repeated defaults of the same or a different nature regardless of cure, franchisee refuses to provide information on or reports required by Gold Star or to permit inspections or audits, franchisee fails to submit financial statements or sales reports when same are due hereunder, Gold Star discovers that franchisee has made any material misrepresentations or omitted any material fact in the information furnished by franchisee in connection with the grant of this franchise, or franchisee sells the Products at any location other than the Retail Location or in any form other than that approved by Gold Star are all reasons for termination after opportunity to cure.