Does Gold Star grant franchisees an exclusive territory?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
You will not receive exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
Your Franchise is limited to the operation of 1 Gold Star Restaurant at a specific Retail Location, which must be approved by Gold Star. We agree not to operate or license another to operate a Gold Star Restaurant in a territory we designate in your Franchise Agreement (your "Protected Territory"), subject to our right to establish certain "Special Purpose Outlets" in the Protected Territory and to sell or distribute Gold Star products using the Marks through alternate distribution channels in the Protected Territory. A "Special Purpose Outlet" is a Gold Star Restaurant located inside a shopping mall or center, zoo, airport, race track, amusement park, fairgrounds, sports stadium, hospital, factory, bar, school, gas station, and special event. You are not granted (nor should you infer) any exclusive, protected, or territorial rights of any kind whatsoever outside of the Protected Territory, including any contiguous market area.
The size of your Protected Territory depends primarily upon the location of your Restaurant. The Protected Territory for a Special Purpose Outlet will be the relevant building or facility. The Protected Territory boundaries for other Restaurants are those set forth in Franchisees' Franchise Agreements. In determining Protected Territory boundaries, Gold Star evaluates a number of factors, including density of the population, earnings of the populace, and traffic counts.
Gold Star has established and plans to continue establishing company-owned outlets and other channels of distribution using the Marks, including company-owned Restaurants and distribution through grocery stores, convenience stores, other food service establishments, establishments or concessions located within other facilities (such as zoos, airports, race tracks, amusement parks, fairgrounds, sports stadiums, special events and the like) and food brokers, and also may expand through or establish other traditional and non-traditional distribution channels, methods and venues.
You do not receive the right to acquire additional Franchises within your Protected Territory, or contiguous territories or anywhere else. You do not receive the right to relocate your Franchise and must obtain Gold Star's prior written consent in order to change your Retail Location.
You are free to solicit customers or accept orders in any geographic area, just as Gold Star, its affiliates and other Franchisees may solicit customers or accept orders from anywhere, including your Protected Territory or the territory of any other Franchisee.
Source: Item 12 — Territory (FDD pages 36–37)
What This Means (2025 FDD)
According to the 2025 Gold Star Franchise Disclosure Document, franchisees do not receive an exclusive territory. However, Gold Star does grant a "Protected Territory" to franchisees, within which Gold Star agrees not to operate or license another to operate a Gold Star Restaurant. This protection is subject to Gold Star's right to establish "Special Purpose Outlets" within the Protected Territory, such as those located in shopping malls, zoos, airports, and other similar venues. Gold Star also retains the right to sell or distribute Gold Star products through alternative channels of distribution within the Protected Territory, such as grocery stores and convenience stores.
The size of the Protected Territory depends primarily on the location of the Restaurant, with Special Purpose Outlets having a Protected Territory limited to the relevant building or facility. For other Restaurants, Gold Star evaluates factors like population density, earnings, and traffic counts to determine the Protected Territory boundaries. Franchisees do not have the right to acquire additional Franchises within their Protected Territory or elsewhere, nor do they have the right to relocate their Franchise without Gold Star's prior written consent.
Gold Star also has the ability to establish company-owned outlets and other channels of distribution using the Gold Star marks, including company-owned Restaurants and distribution through grocery stores, convenience stores, other food service establishments, establishments or concessions located within other facilities (such as zoos, airports, race tracks, amusement parks, fairgrounds, sports stadiums, special events and the like) and food brokers, and also may expand through or establish other traditional and non-traditional distribution channels, methods and venues. Franchisees are free to solicit customers or accept orders in any geographic area, and Gold Star, its affiliates, and other Franchisees may solicit customers or accept orders from anywhere, including a franchisee's Protected Territory.