If a Gold Star franchisee's Gross Sales figure is inaccurate, what are the potential consequences?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.4.3 If FRANCHISEE knowingly or through gross negligence maintains false Business Records or knowingly or through gross negligence submits any false report to the COMPANY;
FRANCHISEE is responsible for ensuring accuracy of the Gross Sales figure that is used for calculation of continuing franchise fees and Brand Building Fees.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to the 2025 Gold Star Franchise Disclosure Document, franchisees are responsible for the accuracy of their Gross Sales figures, which are used to calculate continuing franchise fees and Brand Building Fees. Gold Star obtains weekly sales information directly from the franchisee's POS system. If the system fails, the franchisee must provide a weekly sales report, certified as accurate, to Gold Star by Thursday. If a franchisee fails to report Gross Sales on time, Gold Star can debit the franchisee's account based on an average of the previous three months' fees.
If a Gold Star franchisee knowingly or through gross negligence maintains false Business Records or knowingly or through gross negligence submits any false report to the COMPANY, this constitutes a breach of the franchise agreement.
Submitting false reports or maintaining false business records are grounds for default under the Gold Star franchise agreement. Defaulting on the franchise agreement can lead to termination of the agreement.