If the Gold Star franchisee is an individual and designates someone else as manager, what on-premises participation is required?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
You must designate and give Gold Star written notice of the name of, an individual who will serve as manager and, if applicable, area manager of the Restaurant (that manager, and any area manager, are referred to in this disclosure document individually as a "Manager" and collectively as the "Managers"). If you are an individual, you either must be the designated Manager or, if you designate some other individual to serve as Manager, you must, on a weekly basis, be present and actively participate in the day-to-day, on-premises supervision and operation of the Restaurant for at least 10% of the Restaurant's operating hours.
Source: Item 15 — Obligation to Participate in the Actual Operation of the Franchise Business (FDD pages 41–42)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, if a franchisee is an individual and chooses to designate someone else as the manager of their Gold Star restaurant, they must still be present and actively involved in the restaurant's operations. Specifically, the franchisee must be present and participate in the day-to-day supervision and operation of the restaurant for at least 10% of the restaurant's operating hours on a weekly basis.
This requirement ensures that even if an individual franchisee hires a manager, they maintain a level of involvement in the business. This could involve tasks such as overseeing staff, managing inventory, ensuring customer satisfaction, or handling administrative duties. The 10% requirement means that if the restaurant is open for 80 hours a week, the franchisee would need to be present and actively participating for at least 8 hours.
This on-premises participation requirement is a condition of the franchise agreement. Failing to meet this requirement could potentially lead to a breach of contract. Gold Star mandates this to ensure brand consistency and quality control across all franchise locations. It also helps the franchisee stay informed about the business's performance and any issues that may arise. This requirement is fairly typical in the franchise industry, as franchisors often want to ensure that franchisees are actively managing their businesses, even if they delegate some responsibilities to a manager.