For how long after termination or expiration is a Gold Star franchisee prohibited from operating a competing business?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in | Summary |
|---|---|---|
| Franchise Agreement | ||
| q. Non-competition covenants during the term of the Franchise | Section 11 | No involvement in competing business anywhere; no allowing any part of any owned or controlled premises in your Protected Territory to be used to any extent for any competing business |
| r. Non-competition covenants after the Franchise is terminated or expires | Section 11 | No competing business for 3 years and within 10 miles of your Retail Location or any other Gold Star (existing or approved) franchise (including after assignment); no part of any owned or controlled premises in your Protected Territory to be used to any extent for any competing business for 3 years |
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, a franchisee faces certain non-competition restrictions after the franchise agreement is terminated or expires. Specifically, the franchisee is prohibited from engaging in any competing business for a period of 3 years. This restriction applies within a 10-mile radius of the franchisee's original Retail Location or any other existing or approved Gold Star franchise location, including locations approved after assignment.
Additionally, the franchisee is restricted from allowing any part of any owned or controlled premises within their Protected Territory to be used for any competing business. This restriction also lasts for 3 years following the termination or expiration of the franchise agreement. These non-compete obligations are detailed in Section 11 of the Franchise Agreement.
These post-term non-compete clauses are fairly standard in the franchise industry to protect the brand and other franchisees. Prospective Gold Star franchisees should carefully consider the implications of these restrictions, especially if they plan to remain in the same geographic area after their franchise agreement ends. It is also important to note that all individuals holding an interest in the franchise must personally agree to be bound by these non-compete provisions.