What happens if a Gold Star franchisee violates the franchise agreement?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.5.1 FRANCHISEE fails to make or cause to make any payment of any Brand Building Fee, continuing franchise fee or other fee or payment due hereunder, and FRANCHISEE fails to cure such failure to pay within 10 days after the COMPANY's written notice thereof;
- 14.5.2 FRANCHISEE (or any Related Party) breaches any term or condition of (a) this Agreement (except to the extent covered by Section 14.3 or 14.4); or (b) any term or condition of any other agreement or obligation with the COMPANY or its affiliates;
- 14.5.3 FRANCHISEE fails to sell Products of the highest quality or otherwise fails to comply with the COMPANY's standards;
- 14.5.4 FRANCHISEE or the Retail Location fails any inspection performed by COMPANY herein;
- 14.5.5 FRANCHISEE defaults under or fails to perform any term or condition of any Lease, mortgage, deed of trust or other agreement covering the Business or the Retail Location;
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to the 2025 Gold Star Franchise Disclosure Document, several consequences can arise if a franchisee violates the franchise agreement. Gold Star can terminate the franchise agreement if the franchisee fails to make payments for Brand Building Fees, continuing franchise fees, or other payments and does not correct this within 10 days of written notice from Gold Star.
Additionally, Gold Star may terminate the agreement if the franchisee breaches any term or condition of the franchise agreement or any other agreement with Gold Star or its affiliates. This also applies if the franchisee fails to sell products of the highest quality or comply with Gold Star's standards, or if the Retail Location fails an inspection performed by Gold Star. Furthermore, defaulting on any lease, mortgage, deed of trust, or other agreement covering the business or Retail Location can also lead to termination.
These stipulations highlight the importance of adhering to the franchise agreement and maintaining operational and financial compliance. A prospective franchisee should carefully review the terms of the franchise agreement and related documents to fully understand their obligations and the potential consequences of non-compliance. Maintaining open communication with Gold Star and addressing any issues promptly can help avoid potential violations and ensure a successful franchise operation.