What is the purpose of the Brand Building Fund for Gold Star?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
Special Purpose Outlet is 4% of Gross Sales.
Note 3: Gold Star Currently has designated Gold Star Chili Advertising Association, an Ohio nonprofit corporation ("GSCAA"), to oversee the franchisee Brand Building fund (the "Brand Building Fund"). Gold Star is the sole member of GSCAA, and a majority of GSCAA's current board of trustees are officers, directors, employees or shareholders of Gold Star. Brand Building Fees are imposed by Gold Star under the Franchise Agreement. The Brand Building Fund does not itself impose fees. All Brand Building Fees are nonrefundable; however, when a Franchisee opening a new Restaurant reviews and approves the New Restaurant Opening Marketing Plan, it is the current practice for those expenses (currently, at least $15,000) to be funded by GSCAA and the Franchisee to reimburse their portion in the amount of $10,000, the remainder funded by GSCAA. In addition, it is currently the practice for Gold Star to spend $10,000 of Brand Building Fees on advertising and support to a Franchisee who "re-opens" a Restaurant that it has spent more than $50,000 remodeling and invoice the Franchisee for their contribution in the amount of $5,000 for grand re-opening marketing and promotion. Neither Gold Star nor GSCAA is obligated to continue these practices. At the option of Gold Star, you must enter into and maintain a debit authorization agreement authorizing Gold Star to cause your bank account to be debited for charges, including Continuing Franchise Fees, Brand Building Fees and late payment charges.
Note 4: The amount of the Brand Building Fee is determined in Gold Star's sole discretion. However, the Brand Building Fee will not be increased by more than 1% in any 12-month period. In many cases, the Brand Building Fee assessed for the operation of a Special Purpose Outlet, as defined in Item 12 below, is 4% of Gross Sales.
Note 5: You must assign to Gold Star or its designee all product and/or advertising rebates or allowances that are granted to you by certain suppliers, as directed by Gold Star. Currently assignments are required with respect to our soft drinks supplier, with whom Gold Star has negotiated a group purchase arrangement. Although not obligated to do so by the Franchise Agreement or any related agreement, Gold Star's current practice is to have the assigned Franchisee supplier payments made (and to have all of the rebate or allowance payments from those suppliers receivable by Gold Star for company-owned Restaurants made) to GSCAA for use in the Brand Building Fund. Gold Star reserves the right to change this practice
Source: Item 6 — OTHER FEES (FDD pages 12–18)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the Brand Building Fund, overseen by the Gold Star Chili Advertising Association (GSCAA), is used for advertising and support. GSCAA is an Ohio nonprofit corporation. Gold Star is the sole member of GSCAA, and a majority of GSCAA's current board of trustees are officers, directors, employees or shareholders of Gold Star.
The Brand Building Fund is supported by Brand Building Fees, which are imposed by Gold Star under the Franchise Agreement. These fees are nonrefundable. The amount of the Brand Building Fee is determined in Gold Star's sole discretion. However, the Brand Building Fee will not be increased by more than 1% in any 12-month period. In many cases, the Brand Building Fee assessed for the operation of a Special Purpose Outlet is 4% of Gross Sales.
Notably, when a new Gold Star franchisee reviews and approves the New Restaurant Opening Marketing Plan, the expenses (at least $15,000) are typically funded by GSCAA, with the franchisee reimbursing $10,000. The remainder is funded by GSCAA. Additionally, Gold Star may spend $10,000 of Brand Building Fees on advertising and support for a franchisee who re-opens a remodeled Restaurant (over $50,000 in remodeling costs), invoicing the franchisee $5,000 for grand re-opening marketing and promotion. However, Gold Star and GSCAA are not obligated to continue these practices.
Gold Star also receives product and/or advertising rebates or allowances from certain suppliers, such as their soft drink supplier, which are assigned to Gold Star and directed to GSCAA for use in the Brand Building Fund. Gold Star retains the right to change this practice without notice. Franchisees should be aware that the specific allocation and use of the Brand Building Fund are subject to change at Gold Star's discretion.