Is a Gold Star franchisee required to report local advertising expenditures to the company?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
- 9.2.3 Subject to Section 9.3.8 below, FRANCHISEE shall spend no less than one percent (1%) of its Gross Sales on a monthly basis for local media and advertising (the "Local Marketing Expenditure") in addition to all other obligations set forth in this Article IX. FRANCHISEE shall report all such expenditures to the COMPANY upon request.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, franchisees are required to report local advertising expenditures to the company upon request. Specifically, franchisees must spend at least one percent of their gross sales on local media and advertising monthly, referred to as the "Local Marketing Expenditure."
This requirement ensures that Gold Star franchisees actively promote their individual locations within their respective communities. By mandating a minimum spending threshold and requiring franchisees to report these expenditures, Gold Star maintains a degree of oversight and accountability in local marketing efforts.
Furthermore, if the Brand Building Fund is suspended or terminated, or if the required Brand Building Fee percentage is less than seven percent, Gold Star has the option to increase the Local Marketing Expenditure up to seven percent of the franchisee's Gross Sales. However, the combined total of the Local Marketing Expenditure and any required Brand Building Fees will not exceed seven percent of the franchisee's Gross Sales in any calendar year. This provision allows Gold Star to adjust local marketing requirements based on the status of the Brand Building Fund, ensuring consistent marketing support for the brand.