What is a Gold Star franchisee obligated to pay immediately upon termination or expiration?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
DGMENT, PROMISE, GUARANTEE, INDUCEMENT, UNDERTAKING OR WARRANTY (WRITTEN OR ORAL, EXPRESS OR IMPLIED) OTHER THAN THOSE EXPRESSLY SET FORTH IN THIS AGREEMENT, OR (B) ANY REPRESENTATIONS (WRITTEN OR ORAL, EXPRESS OR IMPLIED) AS TO THE ACTUAL, AVERAGE, POTENTIAL, PROJECTED OR FORECASTED SUCCESS, SALES, PROFITS, COSTS, INCOME OR EARNINGS OF A GOLD STAR CHILI RESTAURANT OR THE FRANCHISE BUSINESS TO BE CONDUCTED BY FRANCHISEE. FRANCHISEE FURTHER ACKNOWLEDGES THAT FRANCHISEE RECOGNIZES THAT THE NATURE OF THE BUSINESS CONDUCTED BY GOLD STAR CHILI RESTAURANTS MAY EVOLVE AND CHANGE OVER TIME; THAT FRANCHISEE'S INVESTMENT INVOLVES BUSINESS RISKS NOT SUSCEPTIBLE TO THE COMPANY'S OR FRANCHISEE'S CONTROL; AND THAT FRANCHISEE'S SUCCESS WILL BE LARGELY DEPENDENT ON FRANCHISEE'S OWN BUSINESS ABILITIES AND EFFORTS.
- 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.
- 27. EXPENSES. If the COMPANY incurs any costs or expenses (including but not limited to attorneys' fees, court costs, other litigation expenses, settlement expenses or other expenses of any kind) in enforcing or protecting the COMPANY's rights under this Agreement, or any judgments, orders or awards relating thereto, or in preparation for or investigation or contemplation thereof, the COMPANY shall be entitled to recover from FRANCHISEE all such costs and expenses on demand, with interest from the date due pursuant to Section 8.3, above.
AS WITNESS the hands of the duly authorized representatives of the parties hereto as of the date of execution by Gold Star Chili, Inc. set forth below.
| to comply | with various provisions | | of this Agreement | (including, | without | |---|---|---|---|---|---| | limitation, | Sections 6, 11 and | 12) | could cause irreparable | damage | to the | You, the franchisee, may cancel this transaction at any time prior to midnight of the fifth business day after the date you sign this agreement. See the attached notice of cancellation for an explanation of this right.
NOTICE OF CANCELLATION
| (Enter date of transaction)
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, upon termination or expiration of the franchise agreement, a franchisee's obligations do not necessarily end. Several sections of the agreement, such as those pertaining to trade secrets, confidentiality, and non-competition, along with any other obligations that reasonably extend beyond the agreement's term, remain in effect. This means that even after the franchise ends, the franchisee must continue to uphold these responsibilities.
Additionally, Gold Star states that the termination or expiration of the agreement does not absolve the franchisee of any existing obligations to Gold Star at the time of termination or expiration. If Gold Star incurs any costs or expenses, including attorney's fees and court costs, while enforcing its rights under the agreement, the franchisee is responsible for covering these costs. These expenses are due on demand, with interest accruing from the due date.
Furthermore, upon termination or expiration, the franchisee must immediately cease using the Gold Star System and Marks. After a 30-day grace period, the franchisee is required to remove all Marks from buildings, signs, and fixtures. If Gold Star exercises its right to enter the Retail Location to make alterations, the franchisee is responsible for the reasonable expenses incurred. These obligations ensure the protection of Gold Star's brand and interests even after a franchise agreement concludes.