What is the Gold Star franchisee's obligation to secure the Retail Location for the term of the franchise agreement?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
LEASE PROVISIONS
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- A provision that restricts the use of the premises solely to the operation of the franchised business;
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- A provision permitting the COMPANY to enter the Retail Location to de-identify the Business without penalty in accordance with Section 14 of this Agreement.
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- A provision requiring the landlord to provide the COMPANY with reasonable advanced notice if there is any contemplated termination and granting the COMPANY a reasonable amount of time, at the COMPANY's option, to avoid such termination (upon any such event, FRANCHISEE shall reimburse the COMPANY for all costs and expenses incurred in connection with such avoidance).
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- A provision that reserves to the COMPANY the right, but not the obligation, to assume FRANCHISEE's leasehold interest, with the right to sublease, upon termination or expiration of the lease or of this Agreement, without any assessment of additional fees, penalties, or rent acceleration; and
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- A provision that modifies the term of the lease so that it is coterminous with this Agreement.
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- A provision that gives the COMPANY the right, but not the obligation, to enter the premises or make modifications necessary to protect the Marks or the System or to cure any default under this Agreement; and
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- A provision that restricts the lease from being modified in a manner that could materially affect the COMPANY's rights with respect to the lease, without the COMPANY's prior written consent.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the franchisee's obligations regarding the retail location are detailed in Exhibit B of the franchise agreement, which outlines specific lease provisions. These provisions are designed to protect Gold Star's interests and ensure the continuity of the franchised business at the approved location.
Specifically, the lease must restrict the premises to only operating the Gold Star franchised business. The lease must allow Gold Star to enter the location to de-identify the business without penalty according to Section 14 of the agreement. The lease must also require the landlord to provide Gold Star with advanced notice of any potential termination and allow Gold Star time to avoid such termination, with the franchisee reimbursing Gold Star for any associated costs.
Furthermore, the lease should grant Gold Star the right, but not the obligation, to assume the franchisee's leasehold interest upon termination or expiration of the lease or the franchise agreement, without additional fees or penalties. The lease term should be coterminous with the franchise agreement, ensuring that the lease and franchise agreement end at the same time. Gold Star also has the right to enter the premises to protect its marks or cure any default under the agreement. Finally, the lease cannot be modified in a way that materially affects Gold Star's rights without prior written consent.
These lease provisions ensure that Gold Star maintains control over the retail location and can protect its brand and system. Prospective franchisees should carefully review these requirements and ensure that their lease agreements comply with these provisions to avoid potential conflicts or termination of the franchise agreement.