What is the Gold Star franchisee's obligation regarding the ingredients used in the store?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
7. PURCHASE OF INGREDIENTS, SUPPLIES AND MATERIALS.
- 7.1 Proprietary Products. In order to establish uniformity of taste and quality of the COMPANY's chili products, the COMPANY has developed and will continue to develop secret blends of spices and flavorings, its own secret chili Product and related items as designated by the COMPANY in the Manual or otherwise in writing from time to time (collectively, the "Proprietary Products"), which must be purchased by Restaurant franchisees only from the COMPANY or suppliers specifically appointed by the COMPANY for use by Restaurant franchisees. FRANCHISEE agrees to purchase from the COMPANY or its designees all of the Store's requirements for Proprietary Products, as shall be specified from time to time in the Manual or otherwise in writing by the COMPANY, at the COMPANY's or such designee's prices in effect from time to time, and on such shipping, payment, delivery, warranty and other terms as the COMPANY (or its designees, as applicable) may determine in its sole discretion from time to time, and to pay for all such Proprietary Products purchased in accordance with such terms and conditions.
- 7.2 Approved Suppliers. FRANCHISEE shall purchase all food supplies, ingredients and equipment used to make Products (including Proprietary Products), any items used in the construction of the Retail Location or operation of the Business, or otherwise offered for sale or used in the Store and not required to be purchased from the COMPANY or its designees, solely from sources who demonstrate, to the continuing satisfaction of the COMPANY, the ability to meet the COMPANY's then current standards and specifications for such items, who possess adequate quality controls and capacity to supply FRANCHISEE's needs promptly and reliably, who have been approved in writing by the COMPANY as a source of such item prior to any purchases by FRANCHISEE from such supplier and who have not thereafter been disapproved. FRANCHISEE acknowledges that the COMPANY may from time to time receive rebates or discounts from such suppliers.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, franchisees must adhere to specific requirements regarding the purchase and use of ingredients. To maintain uniformity in taste and quality, franchisees are required to purchase "Proprietary Products," such as secret blends of spices and flavorings, exclusively from Gold Star or its designated suppliers. These Proprietary Products are specified in the Manual or in writing. Franchisees must buy all required Proprietary Products from Gold Star or its designees at the prices and terms set by Gold Star.
For all other food supplies, ingredients, and equipment not designated as Proprietary Products, franchisees must purchase them only from suppliers approved in writing by Gold Star. These suppliers must consistently meet Gold Star's standards and specifications, have adequate quality controls, and reliably supply the franchisee's needs. Gold Star retains the right to disapprove any supplier.
These stipulations ensure that all Gold Star restaurants maintain consistent quality and uniformity, which is critical for brand reputation and customer satisfaction. While franchisees have some flexibility in sourcing non-proprietary items, Gold Star maintains strict control over key ingredients and suppliers to protect the brand's standards. Franchisees should be aware that Gold Star may receive rebates or discounts from approved suppliers.