Does Gold Star need to justify its rejection of a proposed retail location?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
Each Franchise is granted only for a single Restaurant at a specified Retail Location. You select your site subject to Gold Star's approval. Gold Star can refuse to approve any proposed Retail Location for any reason or no reason solely in its discretion; and rejection need not be justified by any standard. Some factors considered by Gold Star in evaluating a proposed Retail Location include suitability of the neighborhood, proximity to other restaurants, population density, traffic flow, parking, customer draws in the immediate area and visibility of the proposed Retail Location from streets and parking facilities. If Gold Star rejects a proposed Retail Location, you will have to locate a new proposed Retail Location that is not rejected.
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 26–36)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, Gold Star has broad discretion in approving retail locations. Gold Star can refuse to approve any proposed retail location for any reason, and is not required to justify its rejection. However, Gold Star does list some factors it considers when evaluating a location, including the suitability of the neighborhood, proximity to other restaurants, population density, traffic flow, parking, customer draws, and visibility.
This means that a prospective franchisee could spend time and money researching and proposing a location, only to have it rejected by Gold Star without explanation. If Gold Star rejects a proposed location, the franchisee will need to find a new location that meets Gold Star's approval.
Furthermore, if a Franchise Agreement is signed before a site is approved, the franchisee has six months to find an acceptable location. Failure to secure an approved location within this timeframe constitutes a default of the Franchise Agreement. Similarly, failure to open the franchised Restaurant within twelve months of site approval also results in default. In either case, Gold Star can terminate the Franchise Agreement if the default is not remedied within 10 days of written notice.