Can a Gold Star franchisee face competition from other franchisees?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
You will not receive exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
Your Franchise is limited to the operation of 1 Gold Star Restaurant at a specific Retail Location, which must be approved by Gold Star. We agree not to operate or license another to operate a Gold Star Restaurant in a territory we designate in your Franchise Agreement (your "Protected Territory"), subject to our right to establish certain "Special Purpose Outlets" in the Protected Territory and to sell or distribute Gold Star products using the Marks through alternate distribution channels in the Protected Territory. A "Special Purpose Outlet" is a Gold Star Restaurant located inside a shopping mall or center, zoo, airport, race track, amusement park, fairgrounds, sports stadium, hospital, factory, bar, school, gas station, and special event. You are not granted (nor should you infer) any exclusive, protected, or territorial rights of any kind whatsoever outside of the Protected Territory, including any contiguous market area.
Source: Item 12 — Territory (FDD pages 36–37)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, a franchisee may face competition from other franchisees. Gold Star does not grant exclusive territories, meaning that other franchisees, outlets owned by Gold Star, or other distribution channels or competitive brands controlled by Gold Star could operate in the same area.
While a franchisee is granted a "Protected Territory," this is limited to the specific retail location of their Gold Star Restaurant. Gold Star retains the right to establish "Special Purpose Outlets" within the Protected Territory, such as those located in shopping malls, zoos, airports, or sports stadiums. Additionally, Gold Star can sell or distribute products using their trademarks through alternate distribution channels within the Protected Territory.
This lack of exclusive territory and the possibility of Special Purpose Outlets within the Protected Territory means that franchisees could face direct competition from other Gold Star locations or channels. A prospective franchisee should carefully consider the potential impact of this competition on their restaurant's profitability and market share.