What are the liquidated damages for each breach of confidentiality related to a Gold Star franchise?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
n-refundable |
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Renewal Fee10 | Set by Gold Star in its discretion – currently $5,000 | Prior to renewal of franchise agreement | Payable to Gold Star Non-refundable |
| Relocation | You will reimburse us for our reasonable out-of-pocket costs concerning the relocation | Promptly after receiving an invoice from Gold Star | Payable to Gold Star Non-refundable |
| Operating Fee11 | 125% of Gold Star, or its designees, cost of operation | Same as Continuing Franchise Fee | Payable to Gold Star or its designated operator Non-refundable |
| Operating Deficiency Fee12 | Daily fee of $100 for each day you fail to cure operating deficiencies after expiration of the cure period | On demand | Payable to Gold Star or its designated operator Non-refundable |
| Audit Fee13 | Cost of audit plus interest and late payment charge on underpayment | On demand | Payable to Gold Star Non-refundable |
| Liquidated Damages upon Breach of Confidentiality14 | $100,000 for each breach | On demand | Payable to Gold Star Non-refundable |
| Indemnification15 | Amount of claim, loss, damages, etc. | On demand | Payable to Gold Star and its officers, directors, employees, agents, affiliates, successors and assigns Non-refundable |
| Late Payment Charge16 | Interest of lesser of 1½% per month or the maximum rate permitted by law, plus $25 | On demand | Payable to Gold Star Non-refundable |
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Insufficient Funds Fee | $50 for each unsatisfied attempt to draw Continuing Franchise Fee or Brand Building Fees from your account by direct deposit. |
Source: Item 6 — OTHER FEES (FDD pages 12–18)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, a franchisee must pay $100,000 as liquidated damages for each breach of confidentiality. This fee is payable to Gold Star on demand and is non-refundable.
This obligation extends not only to the franchisee but also to their partners, shareholders, officers, directors, employees, agents, or any other person under their control. The franchisee (and each of their officers individually) agrees to pay this sum under Section 12.2 of the Franchise Agreement.
It's important to note that the liquidated damages provision does not prevent Gold Star from pursuing injunctive or other legal remedies. Furthermore, the franchisee is responsible for covering Gold Star's costs and expenses, including attorney's fees and court costs, associated with enforcing or protecting their rights under the Franchise Agreement. These costs also accrue interest from the due date at the rate applicable to late payments.