What monetary obligations must a Gold Star franchisee satisfy before transferring their franchise?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
ange 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.
- 13.4 Company's Non-Exercise. If the COMPANY elects not to exercise such first right of refusal, such sale or transfer shall not take place without the prior written consent of the COMPANY. The COMPANY shall not be required to give its consent unless, in addition to the requirements of Section 17, the following conditions are met prior to the consummation of the Transfer:
- 13.4.1 FRANCHISEE is not in default of this Agreement, or any other agreement with the COMPANY, or its affiliates, and all of its accrued monetary obligations to the COMPANY or its affiliates have been satisfied;
- 13.4.2 The transferor, and its shareholders, members and partners, have executed a general release, in form and substance satisfactory to the COMPANY (and if applicable, conforming to requirements of local Franchise Law, as such term is defined in Section 22.1, below), of any and all claims against the COMPANY, its affiliates, shareholders, directors, officers and employees;
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to the 2025 Gold Star FDD, a franchisee must meet certain monetary obligations before they can transfer their franchise. Specifically, the franchisee must not be in default of the Franchise Agreement or any other agreement with Gold Star or its affiliates. All accrued monetary obligations to Gold Star or its affiliates must be satisfied. Additionally, the franchisee must pay Gold Star the then-current transfer fee. As of the date of the FDD, the transfer fee is $3,500.00, but this amount is subject to change at Gold Star's discretion.
In addition to settling all outstanding debts and paying the transfer fee, the potential transferee must also meet Gold Star's requirements for new operators. This includes demonstrating good moral character and reputation, satisfactory credit ratings, acceptable business qualifications, and satisfactory completion of training programs. The transferee must also show the ability to comply fully with the terms of the then-current franchise agreement.
These requirements ensure that the Gold Star franchise system maintains its financial stability and operational standards even when a franchise unit changes ownership. By requiring the franchisee to be current on all payments and the transferee to meet certain qualifications, Gold Star aims to minimize disruptions and maintain the brand's reputation. Prospective franchisees should be aware of these conditions and factor them into their long-term business plans, as failing to meet these obligations can prevent a franchise transfer.