What factors does Gold Star rely on when granting a franchise?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
Except for the protections provided in this Section 1.3, the franchise and other rights granted herein are non-exclusive.
The COMPANY agrees not to operate or license another to operate a Restaurant within the territory defined on the cover page hereof (the "Protected Territory") so long as FRANCHISEE: (i) fully complies with all methods, procedures, standards and specifications required by the COMPANY in the Manual (defined in Section 3.3 below) or otherwise in writing; and (ii) does not violate any of the other provisions of this Agreement or has cured such violation in the time period provided for herein.
Notwithstanding the foregoing, the COMPANY may (x) establish or license another to establish one or more Special Purpose Outlets (as defined below) within the Protected Territory and (y) sell or otherwise distribute within the Protected Territory products similar to or the same as those offered by the Restaurant through alternative channels of distribution (including without limitation grocery and convenience stores and internet, direct mail and catalog sales); provided, however, that in the event that the Retail Location is a Special Purpose Outlet, the COMPANY will not operate or license another to operate an additional Restaurant in the same building as the Special Purpose Outlet.
A "Special Purpose Outlet" is defined as a Gold Star Chili restaurant located inside shopping malls or centers, zoos, airports, race tracks, amusement parks, fairgrounds, sports stadiums, hospitals, factories, bars, schools, gas stations, and special events.
Nothing herein shall limit the COMPANY's rights or activities outside of the Protected Territory in any respect whatsoever (without limiting the generality of the foregoing, it is expressly agreed that no exclusive, protected or other territorial rights of any kind whatsoever outside of the Protected Territory, including any contiguous market area, is granted or to be inferred to or for FRANCHISEE).
Nothing herein shall limit the COMPANY, its affiliates or any other franchisee or licensee in soliciting or accepting orders from customers anywhere whether within or outside of the Protected Territory.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Gold Star Chili does not explicitly state the factors it relies on when granting a franchise. However, the document emphasizes the importance of franchisee compliance with the brand's standards and procedures.
Specifically, franchisees must adhere to the methods, procedures, standards, and specifications outlined in the manual and other written communications from Gold Star. These standards are designed to maintain uniform operating procedures, increase demand for products and services, uphold a reputation for quality, service, cleanliness, and customer satisfaction, and protect the brand's goodwill. Franchisees must also ensure their managers are properly trained according to Gold Star's requirements.
While the FDD does not provide a checklist of factors Gold Star uses to evaluate franchise applications, it makes clear that a franchisee's willingness and ability to adhere to the System Standards is critical. Prospective franchisees should inquire with the franchisor about the specific criteria used to evaluate candidates and the relative importance of factors such as financial qualifications, prior business experience, and personal attributes.