What happens if the Gold Star Company modifies the System Standards?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
5.1 System Standards. FRANCHISEE acknowledges and agrees that every detail of the System is important, not only to FRANCHISEE but also to the COMPANY and other Gold Star Chili franchisees, in order to develop and maintain uniform operating standards, increase the demand for the products and services offered by all franchisees, establish and maintain a reputation for the highest degree of quality, service, cleanliness and customer satisfaction, and to protect the goodwill of all Gold Star Chili franchises. FRANCHISEE further acknowledges and agrees that a fundamental requirement of the System, this Agreement, and other Gold Star Chili franchises is adherence by all franchisees to the uniform specifications, standards, operating procedures and rules prescribed by the COMPANY for the development and operation of the Store, including, without limitation, standards and specifications regarding ingredients, methods of food preparation and service, and weight, quality and dimensions of menu items and other products served in the Store (collectively referred to as "System Standards"). Accordingly, FRANCHISEE will conduct and operate the Business at all times in a manner that will preserve and build the goodwill of all Restaurants and of the COMPANY, will comply with each and every System Standard, as periodically modified and supplemented by the COMPANY in its sole and absolute discretion, and will not deviate from the System Standards during the term of this Agreement. System Standards prescribed from time to time in the Manual or otherwise communicated to FRANCHISEE in writing will constitute provisions of this Agreement as if fully set forth in this Agreement. All references to this Agreement include all System Standards as periodically modified.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, franchisees must adhere to the System Standards, which Gold Star can modify and supplement at its discretion. Franchisees must operate their businesses in a way that preserves the goodwill of all Gold Star restaurants and complies with all System Standards. These standards, as modified and communicated in writing, become part of the Franchise Agreement.
This means that Gold Star franchisees are obligated to keep up with any changes to the System Standards. These standards cover various aspects of the business, including ingredients, food preparation, service methods, and the quality and dimensions of menu items. Gold Star communicates these standards through the Manual or in writing.
The implication for franchisees is that they must be prepared to adapt their operations to meet new requirements. Failure to comply with the updated System Standards would be a breach of the Franchise Agreement. Franchisees should pay close attention to any communications from Gold Star regarding changes to the System Standards and promptly implement those changes in their restaurants.