What is GSCAA's role regarding the Brand Building Fund for Gold Star?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
uire you to pay all or a portion of Brand Building Fees to such fund in accordance with the provisions below.
Brand Building Fees collected from you and other Franchisees are currently used in the Brand Building Fund supervised by Gold Star or its designee, currently GSCAA (see Note 3 to Item 6 of this disclosure document).
The Brand Building Fund may disseminate advertising through various media, including print, radio, television, billboards, newspaper and digitally via e-mail and internet advertising. Media coverage may be local, regional or national in scope, all in the discretion of Gold Star or its designee. During the fiscal year ended December 31, 2024, media coverage was typically local in scope and limited to the Greater Cincinnati DMA. In Gold Star's discretion, smaller scale marketing programs, based on the amount of Brand Building Fees generated may be implemented in other selected geographical areas. Currently, such smaller scale marketing programs have been implemented in Lexington, and Somerset Kentucky. Gold Star (and its designee) has complete discretion regarding the Brand Building Fund. Gold Star is not obligated to spend any amount on
advertising in the area or territory where you are located. Neither Gold Star nor GSCAA is under any obligation to make expenditures of collected Brand Building Fees in any particular geographic area or for you or any other particular Franchisee, or to ensure that you or any other particular Franchisee benefits directly or on a pro rata basis from the Brand Building Fund.
GSCAA's in-house marketing team utilizes agencies and freelance contractors for the following: media planning and buying, creative development and production, digital development and production, social media marketing, consumer research, marketing analytics, and public and media relations. Third party technology platforms are used by the in-house marketing department to support the services and activities listed above*.*
You may develop advertising materials for your own use, at your own cost; provided that, you must obtain Gold Star's prior written approval of these advertising materials.
Gold Star has designated GSCAA to administer the Brand Building Fund and the Brand Building Fees which are currently used for the Brand Building Fund. Gold Star and GSCAA have sole discretion to determine, approve or disapprove the creative concepts, materials and media used in the Brand Building Fund and the placement, type, scope and allocation of Brand Building Fund advertising and activities.
The Gold Star Chili Franchisee Advisory Council (the "Council") advises GSCAA on advertising policies. Currently, members of the Council are existing Franchisees (or their respective owners) and are elected by majority vote of Gold Star's Franchisees. Gold Star has the power to form, dissolve or change the Council. The Council serves in an advisory capacity only and does not have operational or decision-making power. Gold Star may, in its sole discretion, expand, modify or eliminate the Council or its responsibilities and is under no obligation to conduct any future advertising program with respect to written governing documents.
All Franchisees must participate in the Brand Building Fund and in any future advertising programs that Gold Star requires. You must pay Brand Building Fees equal to up to 7% of weekly Gross Sales. The Brand Building Fee will not be increased by more than 1% in a 12-month period. Franchisees operating Special Purpose Outlets typically pay Brand Building Fees of 1% less than Traditional Outlets. Your Brand Building Fees are due weekly by Tuesday for the week ended the immediately prior Sunday (based on Gross Sales for the week just ended) and, unless otherwise required by Gold Star, must be paid via a preauthorized debit arrangement that allows Gold Star to cause your bank account to be debited for fees and charges under the Franchise Agreement.
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 26–36)
What This Means (2025 FDD)
According to the 2025 Gold Star Franchise Disclosure Document, GSCAA (which is Gold Star Chili Advertising Association) is designated by Gold Star to supervise and administer the Brand Building Fund. GSCAA's in-house marketing team uses agencies and freelance contractors for media planning and buying, creative development and production, digital development and production, social media marketing, consumer research, marketing analytics, and public and media relations. GSCAA and Gold Star have the sole discretion to determine, approve, or disapprove of the creative concepts, materials, and media used in the Brand Building Fund, as well as the placement, type, scope, and allocation of advertising and activities.
Gold Star franchisees are required to pay Brand Building Fees equal to up to 7% of weekly Gross Sales, with the fee not increasing by more than 1% in a 12-month period. Franchisees operating Special Purpose Outlets typically pay Brand Building Fees of 1% less than Traditional Outlets. These fees are due weekly and are typically paid via preauthorized debit. Gold Star's company-owned restaurants also contribute to the Brand Building Fund on the same basis as franchisees. GSCAA may also receive additional funding from rebates or other payments received by Gold Star from approved suppliers.
GSCAA may withhold a portion of the Brand Building Fees to cover reasonable salaries, administrative costs, and overhead incurred in its advertising activities. The balance of the remittances is used for local, regional, and/or national advertising, promotional, and public relation activities. Any Brand Building Fees that are not spent in the fiscal year in which they accrue are retained in the Brand Building Fund until expended. An unaudited report of the use and application of the Brand Building Fund will be prepared annually by Gold Star or GSCAA and provided to franchisees upon written request.
The Gold Star Chili Franchisee Advisory Council advises GSCAA on advertising policies. The council members are existing franchisees elected by a majority vote of Gold Star's franchisees. However, Gold Star has the power to form, dissolve, or change the council, and the council serves only in an advisory capacity without operational or decision-making power. Gold Star is not obligated to spend any amount on advertising in the area or territory where a franchisee is located, and neither Gold Star nor GSCAA is obligated to make expenditures in any particular geographic area or to ensure that any franchisee benefits directly or on a pro rata basis from the Brand Building Fund.