Does the Gold Star franchise agreement's non-compete clause extend to renewal or extension terms?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
- 26. SURVIVAL OF TERMS AND CONDITIONS. The obligations of FRANCHISEE under Sections 11, 12, 16, and 19.3 hereof, and any other FRANCHISEE obligations herein that are stated to, or are of a type that would reasonably, survive or apply beyond termination or expiration of this Agreement, shall survive any termination or expiration of this Agreement; and expiration or termination of this Agreement shall be without prejudice to the rights of the COMPANY against FRANCHISEE thereunder and with respect to other like matters that reasonably would survive the end of a franchise relationship, and shall not relieve FRANCHISEE of any of FRANCHISEE's obligations to the COMPANY existing at the time of expiration or termination.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the obligations of the franchisee, including those under Sections 11, 12, 16, and 19.3 of the agreement, will survive any termination or expiration of the agreement. This includes any franchisee obligations that are stated to, or are of a type that would reasonably, survive or apply beyond termination or expiration of the agreement.
This means that certain restrictions and responsibilities, potentially including non-compete obligations, continue even after the franchise agreement ends, whether through termination or expiration. The expiration or termination of the agreement does not affect Gold Star's rights against the franchisee regarding matters that would reasonably survive the end of the franchise relationship.
Therefore, prospective franchisees should carefully review Sections 11, 12, 16, and 19.3 of the Gold Star franchise agreement to fully understand which obligations extend beyond the term of the agreement. It is important to determine the scope and duration of any post-term non-compete obligations to assess their potential impact on future business activities after the franchise relationship concludes.