How must a Gold Star franchisee notify the company of litigation or other adverse events?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
- 5.15 Notice of Litigation. FRANCHISEE will notify the COMPANY in writing within five (5) days after the commencement of any action, suit or proceeding, or of the issuance of any order, writ, injunction, aware or decree of any court or other governmental agency, relating to FRANCHISEE's compliance with health or safety standards at, or which may otherwise adversely affect the operation or financial condition of, the Store.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, a franchisee must provide written notification to Gold Star within five days of any legal action, suit, or proceeding. This requirement also applies to the issuance of any order, writ, injunction, award, or decree from a court or governmental agency. The notification must pertain to matters relating to the franchisee's compliance with health or safety standards at the store, or any issue that could negatively impact the store's operations or financial stability.
This notification requirement ensures that Gold Star is promptly informed of any potential legal or regulatory issues that could affect the franchise or the brand's reputation. By requiring written notice within five days, Gold Star aims to stay ahead of any problems and work with the franchisee to find solutions. This allows Gold Star to protect its brand and the interests of other franchisees in the system.
For a prospective Gold Star franchisee, this means being prepared to quickly communicate any legal or regulatory issues to the franchisor. Failing to do so within the specified timeframe could potentially lead to breaches of the franchise agreement. Therefore, it is crucial to establish internal procedures for identifying and reporting such events promptly to maintain a good working relationship with Gold Star and adhere to the franchise agreement terms.