Is Gold Star obligated by the Franchise Agreement to conduct advertising for franchised Restaurants?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
Gold Star is not obligated by the Franchise Agreement to conduct any advertising for your franchised Restaurant or any other franchised Restaurant. We have nevertheless established the Brand Building Fund, the purpose of which is to conduct advertising and other marketing activities which promote Gold Star's business, products and services under the Marks. Gold Star reserves the right to establish additional advertising funds in addition to the Brand Building Fund, and may change, merge or dissolve the Brand Building Fund and any other future advertising fund in Gold Star's sole discretion. If Gold Star does establish additional advertising funds, Gold Star may require you to pay all or a portion of Brand Building Fees to such fund in accordance with the provisions below.
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 26–36)
What This Means (2025 FDD)
According to the 2025 Gold Star Franchise Disclosure Document, Gold Star is not obligated by the Franchise Agreement to conduct advertising for franchised Restaurants. However, Gold Star has established a Brand Building Fund to conduct advertising and other marketing activities to promote Gold Star's business, products, and services. Gold Star reserves the right to establish additional advertising funds, and may change, merge, or dissolve the Brand Building Fund and any other future advertising fund at its sole discretion.
Franchisees are required to participate in the Brand Building Fund and any future advertising programs that Gold Star requires. Franchisees must pay Brand Building Fees equal to up to 7% of weekly Gross Sales. The Brand Building Fee will not be increased by more than 1% in a 12-month period. Franchisees operating Special Purpose Outlets typically pay Brand Building Fees of 1% less than Traditional Outlets. These fees are due weekly by Tuesday for the week ended the immediately prior Sunday and are typically paid via a preauthorized debit arrangement.
Even though Gold Star's company-owned Restaurants pay Brand Building Fees to the Brand Building Fund on the same basis as franchisees, Gold Star is not obligated to continue this practice. The Brand Building Fund is not audited; however, an unaudited report of the use and application of the Brand Building Fund will be prepared annually by Gold Star or its designee, and a copy of the report will be provided to any Franchisee upon written request. Gold Star may terminate the Brand Building Fund or suspend its operation at any time, but the fund will not be terminated until all the monies in the fund have been expended.