Who does the Gold Star franchise agreement bind and benefit?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
- **24.
NO THIRD PARTY BENEFICIARIES.** Nothing express or implied herein is intended or shall be construed to confer upon or give any person, firm or corporation, other than the parties hereto, any right or remedy hereunder or by reason hereof.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the franchise agreement primarily binds and benefits Gold Star and the franchisee. Section 24 of the franchise agreement states that it does not confer any rights or remedies to any third party. This means that only Gold Star and the franchisee are intended to benefit from, and be bound by, the terms of the agreement.
However, there are some exceptions to this general rule. For example, if the franchisee is a corporation or limited liability company, the personal guaranty attached as Exhibit C to the franchise agreement means that the individual signing the guaranty is also bound to the agreement. This individual personally guarantees the franchisee's obligations to Gold Star. Additionally, Exhibit B outlines lease provisions that give Gold Star certain rights related to the franchisee's lease, such as the right to enter the premises or assume the lease, which could be seen as indirectly benefiting Gold Star.
In practical terms, this means that a prospective Gold Star franchisee should be aware that the franchise agreement is a contract strictly between them and Gold Star. While other parties, such as landlords or suppliers, may be affected by the agreement, they do not have direct rights under it. The franchisee should also carefully consider the implications of the personal guaranty if they are signing on behalf of a corporate entity, as this could expose their personal assets to liability.