What is the maximum cash contribution Gold Star provides under the Development Incentive Program for remodeling costs?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
products is recognized in the period in which distributors ship the order; recognition of revenue (point in time) results in accounts receivable on the consolidated balance sheets.
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
In determining the amount and timing of revenue from contracts with customers, the Company exercises significant judgment with respect to collectability of the amount. However, the timing of recognition does not require significant judgments as it is based on either the franchise term or the mo
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the company offers a Development Incentive Program to franchisees for rebranding Gold Star Chili. Under this program, a franchisee can receive either a reduction in royalty fees or a cash contribution towards remodeling costs, depending on the package and royalty incentive level they select.
Specifically, Gold Star will provide a cash contribution of 10% of remodeling costs, up to a maximum of $25,000. If a franchisee chooses the cash contribution option, Gold Star records a contract asset that is then amortized over a period of 12 to 18 months. This amortization is netted against the franchisee's royalty fees during that period.
This incentive program can significantly reduce the financial burden on franchisees who are rebranding their Gold Star Chili restaurants. By offering a cash contribution, Gold Star aims to encourage franchisees to update their locations to align with the current brand standards. The amortization of the contract asset against royalty fees provides a structured way for Gold Star to recoup the initial investment while supporting the franchisee's remodeling efforts.