When must a Gold Star franchisee provide certificates of insurance to Gold Star?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
You cannot commence construction upon or open your Restaurant until you have obtained all the required insurance coverage and provided Gold Star with appropriate certificates of insurance showing your compliance with the requirements set forth above. If you fail to obtain and maintain this insurance coverage, we have the right to procure it on your behalf and to charge you for the cost plus interest. We have the right to increase the minimum coverage, decrease the maximum deductible, or require different or additional kinds of insurance to reflect inflation, changes in standards of liability, higher damage awards, or other relevant changes in circumstances. We must give you at least 30 days' written notice.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 21–25)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, a franchisee must provide certificates of insurance to Gold Star before commencing construction or opening their restaurant. The certificates serve as proof that the franchisee has obtained the required insurance coverage.
This requirement ensures that both the franchisee and Gold Star are protected from potential liabilities and financial losses. If a franchisee fails to obtain and maintain the necessary insurance, Gold Star has the right to procure it on the franchisee's behalf and charge the franchisee for the cost, plus interest. This underscores the importance of adhering to the insurance requirements outlined in the franchise agreement.
Gold Star also has the right to increase the minimum coverage, decrease the maximum deductible, or require different or additional kinds of insurance to reflect inflation, changes in standards of liability, higher damage awards, or other relevant changes in circumstances. Gold Star must give the franchisee at least 30 days' written notice of any such changes. This provision allows Gold Star to adapt insurance requirements to changing conditions and ensure adequate protection for the franchise system.
Maintaining adequate insurance coverage is a standard requirement in franchising, as it protects both the franchisee's business and the overall brand from unforeseen events. Prospective Gold Star franchisees should carefully review the insurance requirements and budget accordingly to ensure they can meet these obligations.