What happens if the Gold Star company is no longer offering franchises at the time of renewal?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
16.1 Renewal Option. Except where applicable state law provides otherwise, FRANCHISEE, unless the franchise is terminated as herein otherwise provided, shall have the option at the expiration of the term of this Agreement to renew the franchise granted hereunder by executing the COMPANY's then-current form of franchise agreement for one additional term of ten (10) years unless a different number of renewal terms and/or a different length of such term(s) are set forth on the cover page of this Agreement, which if applicable, the cover page terms shall prevail over the conflicting terms of this section 16 (provided that the COMPANY is then still offering franchises for Restaurants using the Marks and the System and provided that such form of franchise agreement shall not contain provisions for any renewal term):
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, a franchisee has the option to renew their franchise agreement for an additional term, typically ten years, under certain conditions. However, a key condition for renewal is that Gold Star must still be offering franchises for restaurants using their trademarks and system at the time of renewal.
If Gold Star is no longer offering franchises when the renewal term approaches, the franchisee will not be able to renew their franchise agreement. This means the franchisee would not have the option to continue operating their Gold Star restaurant under the franchise agreement after the initial term expires.
This condition is significant for prospective franchisees as it introduces uncertainty about the long-term viability of the franchise. Franchisees should consider Gold Star's long-term plans and market position to assess the likelihood of the company continuing to offer franchises at the time of renewal. It is important to note that the new franchise agreement may also contain different terms, including higher fees, advertising expenditures, different protected territory, and different renewal rights.