In what order are expenditures made from the Gold Star Brand Building Fund?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
In any year, expenditures shall be made first out of earnings of the Brand Building Fund from previous years, next out of earnings of the Brand Building Fund in the current year, and finally out of contributions.
- 9.3.6 A report of the use and application of the Brand Building Fund shall be prepared annually by the COMPANY or its designee and a copy will be provided to FRANCHISEE upon written request of FRANCHISEE therefor.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the Brand Building Fund uses a specific order for expenditures. Gold Star anticipates that all contributions to, and earnings of, the Brand Building Fund will be spent during the taxable year they are received.
The order of expenditures is as follows: First, the fund uses earnings from previous years. Second, the fund uses earnings from the current year. Finally, the fund uses contributions.
This means that franchisee contributions are the last source of funds to be used, after all earnings from the fund have been exhausted. This policy could be seen as beneficial to franchisees, as it prioritizes the use of investment earnings before using their direct contributions. Gold Star also states that a report of the use and application of the Brand Building Fund will be prepared annually and provided to the franchisee upon written request.