What kind of offer must a Gold Star franchisee obtain before transferring Restricted Assets?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding anything contained in this Agreement to the contrary, if FRANCHISEE or any Principal wishes to Transfer or accept an offer to Transfer, in any manner whatsoever, all or any part of any of the Restricted Assets, or any interest therein, FRANCHISEE or its Principals, as the case may be, will first obtain a bona fide, executed, written offer from a fullydisclosed purchaser and will submit an exact copy thereof to the COMPANY.
After the receipt by the COMPANY of such offer, the COMPANY shall have thirty (30) days to purchase the Restricted Assets for the price and on the terms and conditions contained in the written proposed offer.
Failure of the COMPANY to accept such offer within said thirty (30) days shall constitute a rejection (provided that the COMPANY may substitute cash for any form of payment proposed in such offer and shall have not less than sixty (60) days to prepare for
closing). If the COMPANY does not exercise its right of first refusal, FRANCHISEE or such transferor shall have ninety (90) days from the date of the COMPANY's rejection to Transfer the subject property in accordance with this Section, and subject to the COMPANY's approval pursuant to Section 13.4, below, but only upon terms and conditions no more favorable than those offered to the COMPANY. Before consummation of a Transfer to any third party, FRANCHISEE shall submit a copy of all Transfer documentation (signed by the parties, but expressly subject to the COMPANY's right of first refusal) to the COMPANY at least thirty (30) days in advance of any proposed consummation or closing date for the COMPANY's review and comparison with the offer previously submitted to it. If there has been a change or changes in the Transfer terms and the COMPANY considers such change or changes material, the COMPANY shall again have the right of first refusal herein provided. The COMPANY's right of first refusal shall be unrestricted and absolute, and the COMPANY shall in all cases have thirty (30) days to consider and act on each offer or any change in terms and conditions of offer. Nothing contained in this Section shall in any way be deemed to impair the COMPANY's discretion in considering, approving or disapproving any request to Transfer or to consent to a Transfer.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, if a franchisee wishes to transfer any Restricted Assets, they must first obtain a bona fide, executed, written offer from a fully disclosed purchaser. The franchisee must then submit an exact copy of this offer to Gold Star. This requirement applies to any transfer of Restricted Assets, which includes the franchise agreement, the business, the store, the retail location, any lease, any interest or share in the franchisee resulting in a change of control, or all or a material part of the assets pertaining to the store or the business.
After Gold Star receives the offer, they have 30 days to decide whether to purchase the Restricted Assets themselves, using the same price, terms, and conditions outlined in the offer. Gold Star can substitute cash for any proposed form of payment and will have at least 60 days to prepare for closing. If Gold Star declines to exercise its right of first refusal, the franchisee then has 90 days to transfer the property to the third party, subject to Gold Star's final approval.
Before finalizing the transfer to the third party, the franchisee must submit all transfer documentation, signed by all parties but still subject to Gold Star's right of first refusal, to Gold Star at least 30 days before the proposed closing date. This allows Gold Star to review the documentation and compare it to the original offer. If there are any material changes to the terms, Gold Star has the right to review the new terms and potentially exercise its right of first refusal again.
This process ensures that Gold Star maintains control over who becomes a franchisee and under what terms, protecting the brand and the interests of other franchisees. The right of first refusal allows Gold Star to purchase the franchise if they deem it beneficial, while the approval process ensures that any new franchisee meets their standards.