factual

What does 'good cause' include, without limitation, for Gold Star franchise termination?

Gold_Star Franchise · 2025 FDD

Answer from 2025 FDD Document

of FRANCHISEE under this Agreement is material and reasonable and that strict, timely and exact performance by FRANCHISEE of each of such obligations herein is a condition precedent to the continuance of this Agreement. Any breach of any obligation or failure to perform such obligation on the part of

  • FRANCHISEE whether by way of omission or commission shall be deemed to be a substantial breach going to the essence of this Agreement which shall entitle the COMPANY to exercise any and all remedies given in this Agreement, at law or in equity.
  • 14.2 Termination Generally. The COMPANY retains the right to terminate this Agreement for good cause prior to the expiration of its term. As used in this Section, "good cause" shall include, without limitation, the event(s) described in Sections 14.3, 14.4 and 14.5, below.
  • 14.3 Termination without Notice. This Agreement (except as otherwise provided in Section 26, below) and all rights granted to FRANCHISEE hereunder shall terminate without notice to FRANCHISEE if:
    • 14.3.1 FRANCHISEE or any of its partners, members or shareholders becomes insolvent or liquidated or dissolves;
    • 14.3.2 A receiver, trustee or similar creditor's representative is appointed for all or any part of the business, property or assets of FRANCHISEE, or any of its partners, members or shareholders;
    • 14.3.3 FRANCHISEE or any of its partners, members or shareholders files a voluntary petition in bankruptcy, or any other proceeding under any federal or state insolvency or similar law; or consents to the filing of an involuntary petition or proceeding of such type, or makes an assignment for the benefit of creditors; or
    • 14.3.4 An involuntary petition in bankruptcy or any other proceeding under any federal or state solvency or similar law is filed by any other person against FRANCHISEE or any of its shareholders, members or partners without its, his or her acquiescing therein and is not dismissed within sixty (60) days of filing.
  • 14.4 Immediate Termination upon Notice. Upon written notice to FRANCHISEE from the COMPANY, this Agreement and all rights granted FRANCHISEE hereunder shall immediately terminate if any of the following events occur:
    • 14.4.1 FRANCHISEE or any of its shareholders, members or partners, or any Manager, is convicted of any felony that is reasonably likely, in the sole opinion of the COMPANY, to affect adversely the Products, the System, the Marks, or the goodwill associated therewith;
    • 14.4.2 Any provisions of Sections 11 or 12, regarding trade secrets, confidentiality and/or non-competition, are breached;
    • 14.4.3 If FRANCHISEE knowingly or through gross negligence maintains false Business Records or knowingly or through gross negligence submits any false report to the COMPANY;

  • 14.4.4 Without the prior written consent of the COMPANY, FRANCHISEE ceases to operate the Business for more than 24-hour period if required to be operating during that time in the Manual or abandons the Business or the Store or, upon destruction of the Retail Location, fails to rebuild it and resume operation with a reasonable time. However, cessation of the Business shall not constitute default of this Agreement if caused by condemnation, appropriation, expiration of the term of the Lease (except when due to FRANCHISEE's fault or neglect), or when rebuilding following destruction of the buildings at the Retail Location is prohibited by law or the Lease so long as FRANCHISEE is actively seeking a new location pursuant to Section 1.5, above, and is otherwise in compliance with this Agreement;
  • 14.4.5 Any provisions of Section 13 regarding Transfer are breached;

Source: Item 23 — Receipts (FDD pages 53–163)

What This Means (2025 FDD)

According to Gold Star's 2025 Franchise Disclosure Document, Gold Star retains the right to terminate the franchise agreement for good cause before the end of its term. The term 'good cause' includes events described in sections 14.3, 14.4, and 14.5 of the agreement.

Section 14.3 outlines instances for termination without notice, such as the franchisee becoming insolvent, liquidated, or dissolved. It also includes the appointment of a creditor's representative for the franchisee's assets, the franchisee filing for bankruptcy, or an involuntary bankruptcy petition filed against the franchisee that is not dismissed within 60 days.

Section 14.4 details events that allow Gold Star to immediately terminate the agreement with written notice. These include a felony conviction of the franchisee, their partners, members, shareholders, or any manager that could negatively affect Gold Star's products, system, marks, or goodwill. Breaching trade secret, confidentiality, or non-competition provisions as outlined in Sections 11 or 12 also constitutes grounds for immediate termination.

Section 14.5 lists additional causes for termination with notice if the franchisee fails to cure the issue within a specified time frame. These include failure to pay fees within 10 days of written notice, breaching any term of the franchise agreement or any other agreement with Gold Star, failing to maintain product quality standards, failing inspections, defaulting on lease agreements, failing to open the store within 270 days after location approval, or violating any laws or regulations affecting the store.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.