What is the form of documentation for the Gold Star franchise arrangement?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company owns and franchises the Gold Star Chili and Tom + Chee restaurant concept. The franchise arrangement for both brands is documented in the form of a franchise agreement. The franchise arrangement between the Company as the Franchisor and the franchisee as the customer requires the Company to perform various activities to support the brand that do not directly transfer goods and services to the franchise, but instead represent a single performance obligation, which is the transfer of the franchise license. The intellectual property subject to the franchise license is symbolic intellectual property as it does not have significant standalone functionality, and substantially all of the utility is derived from its association with the Company's past or ongoing activities. The nature of the Company's promise in granting the franchise license is to provide the franchisee with access to the brand's symbolic intellectual property over the term of license. The services provided by the Company are highly interrelated with the franchise license and as such are considered to represent a single performance obligation.
Additionally, all franchise agreements require franchisees to purchase proprietary chili from the Company.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to the 2025 Gold Star Franchise Disclosure Document, the franchise arrangement for both the Gold Star Chili and Tom + Chee restaurant concepts is formalized through a franchise agreement. This agreement outlines the obligations of both Gold Star as the franchisor and the franchisee.
The agreement requires Gold Star to perform various activities to support the brand. These activities do not directly transfer goods and services to the franchisee, but instead represent a single performance obligation, which is the transfer of the franchise license. The intellectual property associated with the franchise license is considered symbolic, deriving its utility from its association with Gold Star's activities.
This means that as a Gold Star franchisee, your relationship with the company is governed by a detailed franchise agreement that grants you the right to operate under their brand and utilize their intellectual property. The agreement also stipulates that franchisees must purchase proprietary chili from Gold Star.