Who are the plaintiffs in the lawsuit involving the Gold Star franchise?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
igation**
Pending Item:
Gold Star Chili, Inc. and GSC Properties, LLC v. 21 Partners Group LLC and Rasem Daoud. Gold Star and GSC Properties filed a complaint against 21 Partners Group LLC, an existing franchisee, and Rasem Daoud, its owner, on June 14, 2024. On June 9, 2017, the
defendants executed a Lease Agreement with GSC Properties and a Franchise Agreement with Gold Star pursuant to which defendants operated a franchise (the "Hartwell Gold Star") at 21 East Galbraith Road, Cincinnati, Ohio 45216 (the "Property").
On October 9, 2021, there was a fire at the Property that resulted in a total loss of the Hartwell Gold Star. After the fire, the defendants ceased operating, never rebuilt, and retained insurance proceeds which were to be used to rebuild, the Hartwell Gold Star. Defendant 21 Partners was issued a check for $157,990.41 for replacement of furniture, fixtures, and equipment, but never provided Gold Star with these proceeds, despite having a contractual obligation to do so. Defendant 21 Partners provided Gold Star with building replacement insurance proceeds totaling $455,642.92, but the total cost for restoration is $1,106,670.00, a cost for which defendants are responsible.
The lawsuit was initiated in order to resolve these issues and is currently in the discovery phase.
Source: Item 3 — Litigation (FDD pages 10–11)
What This Means (2025 FDD)
According to the 2025 Gold Star Franchise Disclosure Document, Gold Star Chili, Inc. and GSC Properties, LLC are the plaintiffs in a lawsuit against 21 Partners Group LLC and Rasem Daoud. The complaint was filed on June 14, 2024, regarding a franchise location (the "Hartwell Gold Star") at 21 East Galbraith Road, Cincinnati, Ohio 45216. The lawsuit is related to insurance proceeds following a fire at the property on October 9, 2021, which resulted in a total loss of the Hartwell Gold Star.
The details of the lawsuit indicate that 21 Partners Group LLC received $157,990.41 for the replacement of furniture, fixtures, and equipment but allegedly did not provide these proceeds to Gold Star, despite a contractual obligation to do so. Additionally, while 21 Partners Group LLC provided Gold Star with $455,642.92 in building replacement insurance proceeds, the total cost for restoration is estimated at $1,106,670.00, which Gold Star claims the defendants are responsible for.
As of the FDD publication, the lawsuit is in the discovery phase. This means that Gold Star is actively pursuing legal action to resolve financial discrepancies and contractual obligations with a franchisee who failed to rebuild after a fire and allegedly misused insurance funds. For a prospective franchisee, this highlights the importance of understanding the financial responsibilities and insurance requirements outlined in the Franchise Agreement, as well as the potential for legal disputes arising from unmet obligations.