If a Gold Star franchisee's manager dies or becomes incapacitated, what rights does Gold Star have?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in | Summary |
|---|---|---|
| Franchise Agreement | ||
| p. Your death or disability (or that of any person having an interest in you or in the Franchise) | Section 13.8 and the Small Business Association Addendum if applicable | Franchise must be assigned by estate to approved buyer (and pursuant to transfer conditions) in 6 months (see (m), above); if Manager dies or becomes incapacitated and you do not have in place an acceptable successor Manager, Gold Star has the right to operate your Restaurant and charge you an operating fee during the interim period; Under the Small Business Association Addendum if applicable, Gold Star will operate the Restaurant for no more than a 90-day period of time |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 42–45)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, if a franchisee's manager dies or becomes incapacitated and the franchisee does not have an acceptable successor manager in place, Gold Star has specific rights regarding the operation of the restaurant. Gold Star has the right to operate the restaurant during the interim period. In this situation, Gold Star will charge the franchisee an operating fee for overseeing operations.
However, if the franchisee has a Small Business Association Addendum in place, Gold Star's ability to operate the restaurant is limited. Under the Small Business Association Addendum, Gold Star will operate the restaurant for no more than a 90-day period of time.
This provision is important for prospective franchisees to understand, as the death or incapacitation of a manager could significantly impact the restaurant's operations. Franchisees should discuss with Gold Star what the typical operating fee is and what recourse they have if they disagree with the fee.