Does the Gold Star Franchise Agreement define 'Restricted Assets'?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
Accordingly, neither FRANCHISEE nor any person with an interest in FRANCHISEE shall (directly or indirectly, contingently, voluntarily, involuntarily, by contract, by will, by merger or consolidation, by transfer or issuance of stock, membership or partnership interests, by operation of law or otherwise), without the prior written consent of the COMPANY, sell, assign, transfer, convey, issue, lease, pledge, mortgage, encumber or make any disposition of in any manner (collectively, "Transfer"), or permit the Transfer of, or publicly advertise or offer any Transfer of, all or any part of any of the following or any interest therein (collectively the "Restricted Assets"): this Agreement, the Business, the Store, the Retail Location (whether owned or leased), any Lease, any interest or share in FRANCHISEE which results in a Change-in-Control (defined below), or all or a material part of the assets, real or personal, tangible or intangible, pertaining to the Store or the Business.
A "Change-in-Control" transaction or series of transactions shall occur when 50% or more of the voting power of FRANCHISEE is vested in a person or persons (as applicable) different from the person or persons (as applicable) with whom 50% of voting power was vested immediately prior to the transaction or series of transactions.
For purposes of this subparagraph, all transfers of an ownership interest in a nonindividual franchisee occurring since the date the entity first became a franchisee will be aggregated to determine whether a Change-in-Control has occurred.
- 13.3 Company's Right of First Refusal.
Notwithstanding anything contained in this Agreement to the contrary, if FRANCHISEE or any Principal wishes to Transfer or accept an offer to Transfer, in any manner whatsoever, all or any part of any of the Restricted Assets, or any interest therein, FRANCHISEE or its Principals, as the case may be, will first obtain a bona fide, executed, written offer from a fullydisclosed purchaser and will submit an exact copy thereof to the COMPANY.
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 does define 'Restricted Assets'.
The agreement states that Gold Star has granted the franchise based on the character, skill, aptitude, and business and financial capacity of the franchisee and its Principals. Therefore, franchisees cannot Transfer any of the Restricted Assets without prior written consent from Gold Star. Transfer includes selling, assigning, conveying, issuing, leasing, pledging, mortgaging, encumbering or making any disposition of in any manner.
'Restricted Assets' include the Franchise Agreement itself, the Business, the Store, the Retail Location (whether owned or leased), any Lease, any interest or share in franchisee which results in a Change-in-Control, or all or a material part of the assets, real or personal, tangible or intangible, pertaining to the Store or the Business. A Change-in-Control happens when 50% or more of the voting power of FRANCHISEE is vested in a person or persons different from the person or persons with whom 50% of voting power was vested immediately prior to the transaction or series of transactions.
If a franchisee or any Principal wishes to Transfer or accept an offer to Transfer any of the Restricted Assets, they must first obtain a bona fide, executed, written offer from a fully disclosed purchaser and submit an exact copy to Gold Star. This gives Gold Star the right of first refusal.