If a Gold Star franchisee's manager is convicted of a felony, can the franchise agreement be terminated?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon written notice to FRANCHISEE from the COMPANY, this Agreement and all rights granted FRANCHISEE hereunder shall immediately terminate if any of the following events occur:
- 14.4.1 FRANCHISEE or any of its shareholders, members or partners, or any Manager, is convicted of any felony that is reasonably likely, in the sole opinion of the COMPANY, to affect adversely the Products, the System, the Marks, or the goodwill associated therewith;
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to the 2025 Gold Star Franchise Disclosure Document, the franchise agreement can be terminated if a manager is convicted of a felony. Gold Star can terminate the franchise agreement immediately upon written notice to the franchisee if the manager is convicted of any felony.
However, there is a condition for this termination. Gold Star must determine, in its sole opinion, that the felony is reasonably likely to adversely affect the Products, the System, the Marks, or the goodwill associated with Gold Star.
This means that not all felony convictions of a manager will result in termination. Gold Star retains the discretion to assess the potential impact of the felony on the brand and its operations before deciding to terminate the agreement. This clause protects Gold Star's brand and reputation while also giving them some flexibility in dealing with the situation.