Are purchases by Gold Star and its Franchisees consolidated for determining eligibility for supplier pricing?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
Under the current and proposed purchase arrangement with our soft drink supplier, purchases by Gold Star and its Franchisees are consolidated for purposes of determining whether Gold Star and its Franchisees are eligible for the supplier pricing offered generally to national account customers. Gold Star and its Franchisees currently are classified as national account customers through December 31, 2024. The soft drink supplier pays Gold Star and its franchisees rebates based on the consolidated volume of purchased products per year. Gold Star currently requires any such rebates payable to franchisees to be assigned to Gold Star (See Item 6, Note 5).
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 21–25)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, purchases by Gold Star and its franchisees are consolidated when determining eligibility for supplier pricing with their soft drink supplier. Under the current and proposed purchase arrangement with their soft drink supplier, purchases by Gold Star and its Franchisees are consolidated for purposes of determining whether Gold Star and its Franchisees are eligible for the supplier pricing offered generally to national account customers. Gold Star and its Franchisees currently are classified as national account customers through December 31, 2024.
The soft drink supplier pays Gold Star and its franchisees rebates based on the consolidated volume of purchased products per year. Gold Star currently requires any such rebates payable to franchisees to be assigned to Gold Star. This consolidation allows both Gold Star and its franchisees to potentially benefit from pricing offered to national account customers, which typically involves volume discounts and other incentives.
However, it is important to note that Gold Star requires franchisees to assign any rebates payable to them from the soft drink supplier to Gold Star. These assigned payments are then directed to the GSCAA for deposit to and use in the Brand Building Fund. While this arrangement benefits the brand as a whole, individual franchisees do not directly receive the financial benefit of these rebates. Prospective franchisees should inquire about how the Brand Building Fund is used and how it benefits their individual franchise locations.