Can a Gold Star franchisee face competition from outlets that Gold Star owns?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
There is no guarantee that future programs will be similar to past programs.
Item 12
Territory
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.
The size of your Protected Territory depends primarily upon the location of your Restaurant. The Protected Territory for a Special Purpose Outlet will be the relevant building or facility. The Protected Territory boundaries for other Restaurants are those set forth in Franchisees'
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, outlets that Gold Star owns, or other channels of distribution or competitive brands that Gold Star controls. While a franchisee is granted a "Protected Territory," Gold Star retains the right to establish "Special Purpose Outlets" within that territory.
A "Special Purpose Outlet" is defined as a Gold Star Restaurant located inside specific venues such as shopping malls, zoos, airports, racetracks, amusement parks, sports stadiums, hospitals, bars, or schools. Gold Star also has the right to sell or distribute Gold Star products through alternate distribution channels within the Protected Territory. These channels could include grocery stores, convenience stores, and other food service establishments.
This means that while a Gold Star franchisee has a designated Protected Territory, Gold Star can still operate or license other outlets within that territory, potentially creating competition. The franchisee does not have the right to acquire additional franchises within their Protected Territory or to relocate their franchise without Gold Star's written consent. Therefore, it is important for a prospective franchisee to carefully consider the potential for competition from both company-owned outlets and alternative distribution channels when evaluating a Gold Star franchise opportunity.