How will Gold Star franchisees pay continuing franchise fees and Brand Building Fees?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
8.3 Electronic Debit Payments.
8.3.1 FRANCHISEE will pay continuing franchise fees and Brand Building Fees or any other amounts owed to the COMPANY (or its designee) under this Agreement or any other agreement by pre-authorized electronic debit from FRANCHISEE's bank or other financial institution account. On or before Tuesday of each week, the COMPANY or a designated third party supplier will unilaterally obtain FRANCHISEE's weekly sales information directly from FRANCHISEE's POS system for the preceding week ending on Sunday. In the event the COMPANY or its designated third party supplier is unable to directly obtain FRANCHISEE's weekly sales information for whatever reason, the COMPANY will notify FRANCHISEE and FRANCHISEE will provide to the COMPANY no later than Thursday the weekly sales report or such other information as the COMPANY may require, in a form prescribed by the COMPANY and certified by FRANCHISEE or by the designated individual, accurately reflecting FRANCHISEE's Gross Sales for the preceding week ending on Sunday. The amount of continuing franchise fees and Brand Building Fees due thereon will be calculated based on FRANCHISEE's Gross Sales report that has been obtained through the COMPANY's automated process or, alternatively, if the COMPANY or its designated third party supplier was unable to obtain the report from FRANCHISEE's POS system, and FRANCHISEE was thereby required to provide the weekly sales report manually, the amount of continuing franchise fees and Brand Building Fees shall be calculated based on the report submitted by FRANCHISEE. Each Tuesday, the COMPANY will debit FRANCHISEE's account in an amount equal to the continuing franchise fees and Brand Building Fees reported payable by FRANCHISEE and any amounts owed to the COMPANY under this Agreement or any other agreement. If FRANCHISEE fails to timely report its Gross Sales to the COMPANY by Thursday for any weekly reporting period, then the COMPANY will be authorized to debit FRANCHISEE's account in an amount equal to an average of the continuing franchise fees and Brand Building Fees payable by FRANCHISEE during the immediately preceding three-month period (or such shorter period as the Store has been in operation) for which weekly sales reports were received. FRANCHISEE is responsible for ensuring accuracy of the Gross Sales figure that is used for calculation of continuing franchise fees and Brand Building Fees. Nothing in this paragraph is to be construed to waive
FRANCHISEE's obligations to submit any reports, records or other materials required by this Agreement.
8.3.2 FRANCHISEE will complete and execute an "Authorization for Electronic Fund Transfers" form and any other form provided by the COMPANY for the purpose of authorizing electronic debits, submit any information required by the COMPANY for such authorization, comply with procedures specified by the COMPANY, and perform such additional acts as may be necessary to accomplish payment by electronic fund transfer.
By signing this Agreement, FRANCHISEE authorizes the COMPANY to initiate debit entries and credit correction entries to a designated checking account for payment of continuing franchise fees, Brand Building Fees, or any other amounts payable to the COMPANY, including, without limitation, audit fees (Section 10.2), operating fees (Section 5.14), renewal fee (Section 16.1.8), attorney fees, interest and late fees.
FRANCHISEE will maintain a business account at a bank or other financial institution with the capacity to electronically debit FRANCHISEE's account.
- 8.3.3 FRANCHISEE will maintain an account balance sufficient to make all continuing franchise fees, Brand Building Fees, and other payments to the COMPANY by electronic transfer, and any insufficiency will be considered a default in payment pursuant to Section 14.5.1 of this Agreement.
FRANCHISEE will promptly reimburse the COMPANY for any charges incurred by the COMPANY due to a shortage of funds in FRANCHISEE's account.
8.3.4 FRANCHISEE will maintain a single bank account for its business operations and for the payment of continuing franchise fees, Brand Building Fees or any other amounts payable to the COMPANY.
8.4 Payments Unconditional.
All amounts payable by FRANCHISEE to the COMPANY or any affiliate under or in connection with this Agreement shall be made without set-off or deduction for any reason whatsoever (including but not limited to any alleged breach by the COMPANY of any obligations to FRANCHISEE), and if not paid when due shall bear interest from the date due until paid at the rate of one and one-half percent (1.5%) per month, or the maximum rate permitted by law, whichever is less.
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 make payments for continuing franchise fees and Brand Building Fees through pre-authorized electronic debits from their designated bank account. These payments are typically due on or before Tuesday of each week, and they are calculated based on the Gross Sales from the preceding week, which ends on Sunday. Gold Star or a designated third-party supplier will directly obtain the franchisee's weekly sales information from the franchisee's POS system. If this is not possible, the franchisee must provide the weekly sales report to Gold Star no later than Thursday.
Each Tuesday, Gold Star will debit the franchisee's account for the total amount of continuing franchise fees and Brand Building Fees that are due. If a franchisee fails to submit their Gross Sales report by the specified deadline, Gold Star is authorized to debit an amount equivalent to the average of the fees payable over the previous three months (or a shorter period if the store has been operating for less than three months). It is the franchisee's responsibility to ensure the accuracy of the Gross Sales figure used for calculating these fees.
To facilitate these electronic payments, Gold Star franchisees must complete and submit an "Authorization for Electronic Fund Transfers" form, along with any other required information. Franchisees are also obligated to maintain a business account at a bank or financial institution that supports electronic debit transactions. Furthermore, franchisees must ensure that their account balance is sufficient to cover all continuing franchise fees, Brand Building Fees, and any other payments due to Gold Star. Failure to maintain a sufficient balance will be considered a default in payment. Franchisees are also required to use a single bank account for their business operations and for making payments to Gold Star. All payments must be made without any set-off or deduction, and late payments will incur interest at a rate of 1.5% per month, or the maximum rate permitted by law, whichever is less.