How much notice will Gold Star provide before increasing minimum insurance coverage requirements?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
All insurance policies must name Gold Star Chili as an additional insured franchisor and contain and include standard waivers of subrogation. Franchisee agrees franchisee's insurance is primary and non-contributory. You cannot commence construction upon or open your Restaurant until you have obtained all the required insurance coverage and provided Gold Star with appropriate certificates of insurance showing your compliance with the requirements set forth above. If you fail to obtain and maintain this insurance coverage, we have the right to procure it on your behalf and to charge you for the cost plus interest. We have the right to increase the minimum coverage, decrease the maximum deductible, or require different or additional kinds of insurance to reflect inflation, changes in standards of liability, higher damage awards, or other relevant changes in circumstances. We must give you at least 30 days' written notice.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 21–25)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, Gold Star must provide franchisees with at least 30 days' written notice before increasing minimum insurance coverage requirements. This stipulation is in place to allow franchisees adequate time to adjust their insurance policies and budgets accordingly.
This requirement ensures that Gold Star franchisees are not caught off guard by sudden increases in insurance costs. The 30-day notice period allows franchisees to shop around for the best insurance rates and to make necessary adjustments to their financial planning. It also provides an opportunity for franchisees to discuss any concerns or challenges they may have with the increased coverage requirements with Gold Star.
It is important for prospective Gold Star franchisees to understand that Gold Star retains the right to modify insurance requirements due to factors like inflation or changes in liability standards. While the 30-day notice provides some buffer, franchisees should factor in potential insurance cost increases as part of their ongoing operational expenses. Maintaining open communication with Gold Star regarding insurance matters is advisable to ensure compliance and manage costs effectively.