What happens upon the dissolution of a Gold Star franchisee that is a partnership, limited liability company, or corporation?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
- 13.8 Death or Disability of Person with Controlling Interest.
Upon the death or permanent incapacity of any person with a direct or indirect controlling interest in this franchise or in FRANCHISEE, and upon the dissolution of a FRANCHISEE that is a partnership, limited liability company, or corporation, or the death or permanent incapacity of a FRANCHISEE that is a natural person, the executor, administrator, personal representative or trustee of such person or entity shall transfer his or its interest to a third party approved by the COMPANY within six (6) months.
Such Transfer, including, without limitation, transfers by devise or inheritance, shall be subject to the same conditions of this Section 13 as an intervivos Transfer.
However, in the case of Transfer by devise or inheritance, if the heirs or devisees of any such person are unable to meet the conditions in Section 13.4, the personal representative of the deceased FRANCHISEE shall have a reasonable time to dispose of the decedent's interest in the franchise, which disposition shall be subject to all applicable terms and conditions for transfers contained in this Agreement.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, if a franchisee is a partnership, limited liability company, or corporation and the entity dissolves, the executor, administrator, personal representative, or trustee of the entity must transfer the interest to a third party approved by Gold Star within six months. This requirement also applies upon the death or permanent incapacity of any person with a direct or indirect controlling interest in the franchise or franchisee.
This transfer is subject to the same conditions outlined in Section 13 of the franchise agreement, which typically governs intervivos transfers (transfers made during the person's lifetime). However, if the heirs or devisees are unable to meet the conditions in Section 13.4, the personal representative of the deceased franchisee will have a reasonable time to dispose of the decedent's interest in the franchise, subject to all applicable terms and conditions for transfers contained in the agreement.
This provision ensures that Gold Star maintains control over who operates its franchises, even in the event of significant changes in the franchisee's ownership or structure due to dissolution, death, or incapacity. It also provides a mechanism for the orderly transfer of the franchise to a qualified successor, minimizing disruption to the business. Prospective franchisees should carefully review Section 13 of the franchise agreement to understand the specific conditions that apply to transfers, including those related to approval by Gold Star.