What is the initial franchise fee for opening a Transferred Gold Star restaurant?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
RANCHISEE is opening a New Restaurant and FRANCHISEE is currently party to five (5) or more franchise agreements with the COMPANY and is not, as of the date hereof, in default under any such agreements, an initial franchise fee of Ten Thousand Dollars ($10,000.00), and
- 8.1.4 If FRANCHISEE is entering into this Agreement as a renewal of a previous franchise agreement between FRANCHISEE and the COMPANY, a renewal fee of Five Thousand Dollars ($5,000.00).
- 8.1.5 If FRANCHISEE is opening a Transferred Restaurant (defined below), and is not, as of the date hereof, in default under any other franchise agreements between FRANCHISEE and the COMPANY, the lesser of the initial franchise fee FRANCHISEE would be required to pay if the Transferred Restaurant were a New Restaurant pursuant to Sections 8.1.1 through 8.1.3 and Twenty Five Thousand Dollars ($25,000).
- 8.1.6 The applicable initial or renewal fees set forth in Sections 8.1.1 through 8.1.5 above shall be paid upon execution of this Agreement, is fully earned by the COMPANY upon execution and delivery of this Agreement and is nonrefundable.
- 8.1.7 A continuing franchise fee, based on Gross Sales, in the amount of the Percentage Franchise Fee set forth on the cover page hereof. All continuing franchise fees are nonrefundable. Unless otherwise required in the Manual, the continuing franchise fee shall be payable by FRANCHISEE to the COMPANY on or before Tuesday of each week based on the Gross Sales for the preceding week ending on Sunday pursuant to the preauthorized debit arrangement described in Section 8.3, below.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the initial franchise fee for opening a transferred restaurant depends on whether the franchisee is in default under any other franchise agreements with Gold Star. If the franchisee is not in default, the initial franchise fee is the lesser of $25,000 or the initial franchise fee the franchisee would be required to pay if the transferred restaurant were a new restaurant.
For a new restaurant, the initial franchise fee varies depending on the number of existing Gold Star franchise agreements the franchisee already has with the company. If the franchisee is opening a new restaurant and does not currently have any other franchise agreements with Gold Star, the initial franchise fee is $50,000. If the franchisee has at least one, but fewer than five existing franchise agreements, the initial franchise fee is $25,000. If the franchisee has five or more existing franchise agreements, the initial franchise fee is $10,000.
Therefore, for a transferred restaurant, the initial franchise fee will be the lesser of $25,000 or the fee that would apply if it were a new restaurant. For example, if a franchisee with no existing Gold Star locations opens a transferred restaurant, the initial franchise fee would be the lesser of $25,000 and $50,000 (the fee for a new restaurant with no existing agreements), meaning the franchisee would pay $25,000. This fee is payable upon execution of the franchise agreement and is nonrefundable.