What are the principal markets for Gold Star Chili, Inc.?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
The consolidated financial statements of Gold Star Chili, Inc. (the Company) include its subsidiary, TCWW, LLC, and its consolidated entity, GSC Properties, LLC, a variable interest entity for which the Company owns no equity.
Gold Star Chili, Inc. is primarily engaged in the production and distribution of chili and related products to franchisees and Company owned chili restaurants. The Company has 9 Company stores and 48 franchise locations as of December 31, 2024. The Company also sells chili products through grocery stores. In addition, revenue is derived from franchisees in the form of initial franchise fees and royalty fees. Credit is extended to franchisees and grocery stores based on established credit policies. The Company's principal markets are Greater Cincinnati, Dayton, Ohio and Lexington, Kentucky. The Company's viability is dependent on the ability to sell additional franchises, success of stores to generate sales and the Company's ability to collect its revenue from franchisees.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the company's principal markets are Greater Cincinnati, Dayton, Ohio, and Lexington, Kentucky. As of December 31, 2024, Gold Star has 9 company-owned stores and 48 franchise locations. In addition to sales through these restaurants, Gold Star also generates revenue by selling chili products through grocery stores.
For a prospective franchisee, this information indicates that Gold Star's brand recognition and market presence are strongest in these specific geographic areas. New franchisees may find it easier to establish their business in these markets due to existing brand awareness and established supply chains. However, it also suggests that competition may be more intense in these areas.
The FDD states that Gold Star's viability depends on selling additional franchises, the success of stores in generating sales, and the company's ability to collect revenue from franchisees. This highlights the importance of both franchise sales and the financial health of existing franchisees to the overall stability of the Gold Star franchise system. A potential franchisee should consider these factors when evaluating the risks and opportunities associated with investing in a Gold Star franchise.
Furthermore, the document mentions that Gold Star extends credit to franchisees and grocery stores based on established credit policies. This implies that franchisees may have the option to finance certain aspects of their business through Gold Star, which could be beneficial for those who need assistance with initial investments or ongoing operational costs. However, it also means franchisees must adhere to Gold Star's credit terms and policies.