What proof of grand opening expenditures does Gold Star require from the franchisee?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
s used in connection with the Store. FRANCHISEE
specifically acknowledges and agrees that the word "advertising" as used in this Agreement includes, but is not limited to, signs (including signs on motor vehicles), URLs, e-mail addresses, Internet listings, banners, advertisements, or other services or links on or with the Internet, World Wide Web, Internet service providers, electronic mail services, communication providers, search engines, and similar services.
- 9.2 Grand Opening; Assignment of Rebates; Local Advertising. In addition to FRANCHISEE's obligations under Section 9.3, below:
- 9.2.1 FRANCHISEE shall, within three (3) months following the opening of the Store, spend such amount as the COMPANY may require (at least $10,000) in advertising and promoting the grand opening of the Store in accordance with the COMPANY's grand opening procedures (upon request of the COMPANY, FRANCHISEE shall provide to the COMPANY paid invoices, receipts or other proof of grand opening expenditures acceptable to the COMPANY); and
- 9.2.2 FRANCHISEE shall also assign pursuant to separate written assignments or consents to the COMPANY or its designee, in form and substance satisfactory to the COMPANY, any and all product and/or advertising rebates or allowances granted by suppliers to FRANCHISEE in conjunction with the franchise and required to be assigned by the COMPANY; and
- 9.2.3 Subject to Section 9.3.8 below, FRANCHISEE shall spend no less than one percent (1%) of its Gross Sales on a monthly basis for local media and advertising (the "Local Marketing Expenditure") in addition to all other obligations set forth in this Article IX. FRANCHISEE shall report all such expenditures to the COMPANY upon request.
- 9.3 Brand Building Fund. FRANCHISEE shall participate in the COMPANY's marketing fund (the "Brand Building Fund") as the COMPANY shall direct. Subject to written instructions from the COMPANY, FRANCHISEE shall pay all or a portion of the Brand Building Fee directly to the Brand Building Fund. The Brand Building Fund is currently administered by the Gold Star Chili Advertising Association, an Ohio nonprofit corporation, of which the COMPANY is the only member.
- 9.3.1 The COMPANY, or its designee, shall o
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, franchisees are required to provide proof of grand opening expenditures. Specifically, within three months of opening their Gold Star location, franchisees must spend at least $10,000 on advertising and promotion for the grand opening.
To demonstrate compliance with this requirement, Gold Star mandates that franchisees furnish paid invoices, receipts, or other forms of documentation that the company deems acceptable. This documentation serves as evidence that the franchisee has indeed allocated the necessary funds towards promoting the grand opening of their store.
It is important to note that Gold Star retains the discretion to determine what constitutes acceptable proof of expenditure. This means franchisees should maintain thorough and accurate records of all grand opening-related expenses and be prepared to submit them in a format that meets Gold Star's standards. Meeting these requirements allows the franchisee to potentially receive an additional contribution from the Brand Building Fund toward grand opening advertising and support, at Gold Star's option.