Does the Gold Star Franchise Agreement require the franchisee to acknowledge that they have not been coerced into agreeing to the restrictive covenants?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
consent, FRANCHISEE shall make a timely written request therefor, and such approval may be granted or denied by the COMPANY in its discretion. No approval shall be effective unless given in writing. The COMPANY makes no warranties, representations, or guarantees upon which FRANCHISEE may rely, and assumes no liability or obligation to FRANCHISEE, by providing any waiver, approval, consent or suggestion to FRANCHISEE in connection with this Agreement, or by reason of any neglect, delay or denial of any request therefor.
- 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.
- 25. REPRESENTATIONS OF FRANCHISEE. FRANCHISEE REPRESENTS THAT IT RECEIVED A FRANCHISE DISCLOSURE DOCUMENT FOR GOLD STAR CHILI FRANCHISES FOURTEEN (14) CALENDAR DAYS BEFORE THE EARLIER OF (A) EXECUTION OF THIS AGREEMENT (OR ANY OTHER AGREEMENT RELATING HERETO) AND (B) MAKING ANY PAYMENT TO THE COMPANY, THAT THE FRANCHISEE HAS READ THIS AGREEMENT, THE EXHIBITS AND THE COMPANY'S UNIFORM FRANCHISE DISCLOSURE DOCUMENT IN THEIR ENTIRETY, THAT IT HAS MADE ITS OWN INDEPENDENT INVESTIGATION OF
THE FRANCHISE AND THAT IT HAS BEEN GIVEN THE OPPORTUNITY TO CLARIFY ANY PROVISION AND INFORMATION THAT IT DID NOT UNDERSTAND AND TO CONSULT WITH ITS OWN ATTORNEY OR OTHER PROFESSIONAL ADVISOR AND HAS OBTAINED INDEPENDENT LEGAL AND FINANCIAL ADVICE PRIOR TO EXECUTING THIS AGREEMENT.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to the 2025 Gold Star Franchise Disclosure Document, the franchisee must acknowledge that they have had the opportunity to seek clarification on any provision or information they did not understand. They also acknowledge the opportunity to consult with their own attorney or other professional advisor and have obtained independent legal and financial advice before signing the agreement. This indicates that Gold Star aims to ensure franchisees enter the agreement with a clear understanding and without coercion.
Furthermore, the franchisee acknowledges that neither Gold Star, nor any of its representatives, have made any representations, promises, guarantees, or inducements beyond what is expressly stated in the agreement. This includes representations about the potential success, sales, profits, costs, income, or earnings of a Gold Star Chili restaurant. This acknowledgment is designed to prevent franchisees from claiming they were misled by verbal promises or projections not included in the written agreement.
The franchisee also acknowledges that the nature of the Gold Star Chili business may change over time, that their investment involves business risks outside of Gold Star's control, and that their success will largely depend on their own business abilities and efforts. This statement serves to manage expectations and emphasize that the franchisee's performance is a key factor in the success of their Gold Star franchise.