How does local franchise law affect Gold Star's right to terminate the franchise agreement?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.6 Severability. In the event that any mandatory provision of any local Franchise Law in effect in the FRANCHISEE's jurisdiction restricts the rights of the COMPANY to terminate this Agreement pursuant to this Section 14, then the COMPANY's rights of termination under this Section 14 will be deemed to be amended and shall be interpreted so as to be in conformance with such local Franchise Law, if any.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the franchise agreement is affected by local franchise laws. Specifically, Section 14.6 addresses the severability of the termination clause in relation to local franchise laws. If any mandatory provision of a local franchise law restricts Gold Star's right to terminate the agreement, then Gold Star's termination rights under Section 14 will be amended to conform to that local franchise law.
This means that a Gold Star franchisee's rights regarding termination could vary based on the specific franchise laws in their state or locality. These laws may provide additional protections to franchisees, such as requiring a longer notice period before termination or mandating that the franchisor has "good cause" to terminate the agreement. The franchise agreement defers to these local laws, modifying the termination terms accordingly.
For a prospective franchisee, this clause highlights the importance of understanding the franchise laws in their specific jurisdiction. While the Gold Star franchise agreement is governed by Ohio law, local franchise laws where the store is located can override certain provisions, particularly those related to termination. Therefore, consulting with an attorney familiar with franchise law in the relevant state is crucial to fully understand a franchisee's rights and obligations.