What happens if a Gold Star franchisee dies or becomes disabled?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in | Summary |
|---|---|---|
| Franchise Agreement | ||
| p. Your death or disability (or that of any person having an interest in you or in the Franchise) | Section 13.8 and the Small Business Association Addendum if applicable | Franchise must be assigned by estate to approved buyer (and pursuant to transfer conditions) in 6 months (see (m), above); if Manager dies or becomes incapacitated and you do not have in place an acceptable successor Manager, Gold Star has the right to operate your Restaurant and charge you an operating fee during the interim period; Under the Small Business Association Addendum if applicable, Gold Star will operate the Restaurant for no more than a 90-day period of time |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 42–45)
What This Means (2025 FDD)
According to the 2025 Gold Star Franchise Disclosure Document, Section 13.8 outlines the procedure in the event of a franchisee's death or disability. The franchise must be assigned by the estate to an approved buyer within six months, adhering to the standard transfer conditions. This means the estate needs to find a buyer who meets Gold Star's criteria for new franchisees and complete the necessary transfer paperwork.
If the manager of the Gold Star restaurant dies or becomes incapacitated and there isn't a suitable successor manager in place, Gold Star has the right to step in and operate the restaurant. During this interim period, Gold Star will charge the franchisee an operating fee. This ensures the restaurant continues running smoothly while the estate addresses the management gap.
However, if the Small Business Association Addendum applies, Gold Star's involvement in operating the restaurant is limited to a maximum of 90 days. This addendum provides a shorter timeframe for Gold Star to manage the restaurant during the transition, likely to ensure a quicker resolution and handover to the franchisee's estate or a new approved franchisee. This highlights the importance of having a succession plan in place or key person insurance to protect the business in unforeseen circumstances.