What are all the fees a Gold Star franchisee might pay, considering both Item 5 and Item 6?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
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Item 5
Initial Fees
Initial Franchise Fee.
All Franchisees who are purchasing their first Gold Star Franchise must pay a $50,000 lump sum when the Franchisee signs the Franchise Agreement. Existing Franchisees who are purchasing their second, third or fourth Gold Star Franchise must pay a $25,000 lump sum when the Franchisee signs the Franchise Agreement. Existing Franchisees who are purchasing their fifth or more Gold Star Franchise must pay a $10,000 lump sum when the Franchisee signs the Franchise Agreement. All Franchisees who are purchasing a Gold Star Franchise which will be operated at a location at which a Gold Star restaurant has been operated during the previous six months, will pay the lesser of $25,000 or the amount such Franchisee would otherwise be required to pay if such restaurant is a "new" restaurant, when the Franchisee signs the Franchise Agreement.
You must pay the initial franchise fee in full when you sign the Franchise Agreement. The initial franchise fee is fully earned by Gold Star upon receipt and is not refundable under any circumstances.
Opening Inventory and Other Goods.
You must purchase all of your requirements for Gold Star's chili products and other proprietary food itemsfrom Gold Star or our designees, which currently consist of a bakery product supplier and a supplier for all other food products. You must also purchase certain non-food products approved for Restaurant sale or use, including Restaurant menus, menu board pictures, window logos, window striping and certain food products and supplies from Gold Star or our designees. Payment for these products are uniform for all Franchisees, but the actual amount of payments for inventory and other goods before the Restaurant opens ranges from approximately $8,000 to $12,000, depending upon the quantity of items purchased.
Item 6 OTHER FEES
| Type of Fee | Amount | Due Date | Remarks | |
|---|---|---|---|---|
| Supplier Payment Assignment5 | 100% of product and/or advertising rebates or allowances from certain system- wide suppliers | Assigned when Franchise Agreement is signed | Payable to GSCAA Non-refundable | |
| Inventory and Other Materials6 | See Item 8 of this disclosure document | On delivery or as established by designated supplier | Payable to designated supplier Non-refundable | |
| Manual Fee | $100 for any additional copy | On delivery | Payable to Gold Star Non-refundable | |
| Additional Training Fee7 | Reasonable training fee at our current rates. Also, you must reimburse us for our reasonable out of pocket costs (travel, accommodations, etc.) | Before opening or after you open your franchised Restaurant for business. | Payable to Gold Star Non-refundable | |
| Approval Fees8 | Not to exceed reasonable cost of inspection and actual cost of testing or evaluation | On demand | Payable to Gold Star Non-refundable | |
| Transfer Fee9 | Set by Gold Star in its discretion - currently $3,500 | Before consummation of transfer or sale | Payable to Gold Star by any transferee (not the Franchisor) Non-refundable |
| Type of Fee | Amount | Due Date | Remarks | |---|---|---|---| | Renewal Fee10 | Set by Gold Star in its discretion – currently $5,000 | Prior to renewal of franchise agreement | Payable to Gold Star Non-refundable | | Relocation | You will reimburse us for our reasonable out-of-pocket costs concerning the relocation | Promptly after receiving an invoice from Gold Star | Payable to Gold Star Non-refundable | | Operating Fee11 | 125% of Gold Star, or its designees, cost of operation | Same as Continuing Franchise Fee | Payable to Gold Star or its designated operator Non-refundable | | Operating Deficiency Fee12 | Daily fee of $100 for each day you fail to cure operating deficiencies after expiration of the cure period | On demand | Payable to Gold Star or its designated operator Non-refundable | | Audit Fee13 | Cost of audit plus interest and late payment charge on underpayment | On demand | Payable to Gold Star Non-refundable | | Liquidated Damages upon Breach of Confidentiality14 | $100,000 for each breach | On demand | Payable to Gold Star Non-refundable | | Indemnification15 | Amount of claim, loss, damages, etc. | On demand | Payable to Gold Star and its officers, directors, employees, agents, affiliates, successors and assigns Non-refundable | | Late Payment Charge16 | Interest of lesser of 1½% per month or the maximum rate permitted by law, plus $25 | On demand | Payable to Gold Star Non-refundable |
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Renewal Fee10 | Set by Gold Star in its discretion – currently $5,000 | Prior to renewal of franchise agreement | Payable to Gold Star Non-refundable |
| Relocation | You will reimburse us for our reasonable out-of-pocket costs concerning the relocation | Promptly after receiving an invoice from Gold Star | Payable to Gold Star Non-refundable |
| Operating Fee11 | 125% of Gold Star, or its designees, cost of operation | Same as Continuing Franchise Fee | Payable to Gold Star or its designated operator Non-refundable |
| Operating Deficiency Fee12 | Daily fee of $100 for each day you fail to cure operating deficiencies after expiration of the cure period | On demand | Payable to Gold Star or its designated operator Non-refundable |
| Audit Fee13 | Cost of audit plus interest and late payment charge on underpayment | On demand | Payable to Gold Star Non-refundable |
| Liquidated Damages upon Breach of Confidentiality14 | $100,000 for each breach | On demand | Payable to Gold Star Non-refundable |
| Indemnification15 | Amount of claim, loss, damages, etc. | On demand | Payable to Gold Star and its officers, directors, employees, agents, affiliates, successors and assigns Non-refundable |
| Late Payment Charge16 | Interest of lesser of 1½% per month or the maximum rate permitted by law, plus $25 | On demand | Payable to Gold Star Non-refundable |
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Insufficient Funds Fee | $50 for each unsatisfied attempt to draw Continuing Franchise Fee or Brand Building Fees from your account by direct deposit. |
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, franchisees can expect to pay several fees, both initially and on an ongoing basis. The initial franchise fee for a first-time Gold Star franchisee is $50,000. However, existing franchisees opening additional locations may pay reduced fees: $25,000 for the second, third, or fourth franchise, and $10,000 for the fifth or more. If the location was previously a Gold Star restaurant that operated within the last six months, the fee is the lesser of $25,000 or the standard fee for a new restaurant. Franchisees also need to purchase opening inventory and other goods, which range from approximately $8,000 to $12,000. These initial fees are non-refundable.
Beyond the initial fees, Gold Star franchisees also encounter ongoing fees. These include a Continuing Franchise Fee, which is generally 5% of Gross Sales but may be 4% for Special Purpose Outlets. A Brand Building Fee is also assessed, with the amount determined by Gold Star, but increases are capped at 1% within any 12-month period; this fee may also be 4% of Gross Sales for Special Purpose Outlets.
Additional fees may arise in specific circumstances. These include a Renewal Fee (currently $5,000), relocation expenses, an Operating Fee (125% of Gold Star's operating costs), and an Operating Deficiency Fee ($100 per day for uncorrected deficiencies). Franchisees may also be subject to Audit Fees, Liquidated Damages for breach of confidentiality ($100,000 per breach), Indemnification, and Late Payment Charges (interest of 1½% per month or the maximum legal rate, plus $25). Franchisees are also responsible for subleasing the POS system and for the grand opening marketing and promotion program, which requires a minimum spend of $10,000.
It is important to note that Gold Star may modify certain practices, such as supplier payment arrangements and Brand Building Fund usage, without notice. Franchisees are also typically required to assign product and advertising rebates to Gold Star, particularly from soft drink suppliers. Furthermore, franchisees may incur costs for training programs beyond the initial training for themselves and one designated attendee. Finally, Gold Star has the right to inspect and test non-approved suppliers, with the franchisee bearing the costs of these inspections and evaluations.