From whom must Gold Star franchisees purchase food supplies, ingredients, and equipment?
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 purchase certain items from specific sources to ensure uniformity and quality. Specifically, Gold Star franchisees are required to purchase 'Proprietary Products' which include secret blends of spices, flavorings, and chili products, exclusively from Gold Star or its designated suppliers. These Proprietary Products are designated by Gold Star in the Manual or in writing.
For all other food supplies, ingredients, and equipment used to make products, franchisees must purchase them from sources that meet Gold Star's standards and specifications. These suppliers must demonstrate the ability to meet Gold Star's quality controls, capacity, and reliability standards to the satisfaction of Gold Star. The suppliers must be approved in writing by Gold Star before any purchases are made, and they must not be subsequently disapproved.
This purchasing arrangement allows Gold Star to maintain consistent product quality across all franchise locations. While franchisees have some flexibility in choosing suppliers for non-proprietary items, they must adhere to Gold Star's approved supplier list to ensure compliance with quality and operational standards. Gold Star may also receive rebates or discounts from these approved suppliers.