If a Gold Star franchisee transfers their business, does Gold Star need to approve the purchase agreement?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in | Summary |
|---|---|---|
| l. Gold Star’s approval of transfer by Franchisee | Section 13.4 and the Small Business Association Addendum if applicable | Gold Star has the right to approve all transfers (also see (n) below) |
| m. Conditions for Gold Star approval of transfer | Section 13.4 and the Small Business Association Addendum if applicable | Gold Star not obligated to approve any transfer--minimum conditions include: you are in good standing; new franchisee qualifies; transfer fee paid; purchase agreement approved; training arranged; release signed by you (and your shareholders and partners) and current agreement and related documents signed by new franchisee (also see (n) and (r), below); Under the Small Business Association Addendum, Gold Star may not unreasonably withhold, condition, or delay its consent. |
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, Gold Star has the right to approve all transfers of a franchise. As specified in Section 13.4 of the franchise agreement, a franchisee needs to have the purchase agreement approved by Gold Star before transferring the franchise.
Gold Star is not obligated to approve any transfer, but there are minimum conditions that a franchisee must meet. These conditions include that the franchisee is in good standing, the new franchisee qualifies, the transfer fee is paid, training is arranged, and a release is signed by the current franchisee (and their shareholders and partners). The new franchisee must also sign the current agreement and related documents.
However, under the Small Business Association Addendum, Gold Star may not unreasonably withhold, condition, or delay its consent to the transfer. Prospective franchisees should carefully review Section 13 of the franchise agreement and the Small Business Association Addendum to fully understand the conditions and limitations related to transferring a Gold Star franchise.