What non-competition covenants are Gold Star franchisees subject to after the franchise is terminated or expires?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in | Summary |
|---|---|---|
| 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, franchisees face certain non-competition restrictions if their franchise is terminated or expires. Specifically, for a period of three years, a former franchisee cannot be involved in any competing business within a 10-mile radius of their former Gold Star Retail Location or any other existing or approved Gold Star franchise.
Additionally, for the same three-year period, the franchisee cannot allow any part of premises they own or control within their Protected Territory to be used for any competing business. This restriction applies even after the franchise agreement has been terminated or has expired, including after any assignment of the franchise.
Prospective franchisees should carefully consider these non-competition terms, as they could significantly limit their business opportunities after leaving the Gold Star system. It is also important to note that these covenants may be subject to state laws that could restrict Gold Star's rights, so consulting with a legal advisor is recommended.