What is the purpose of the debit authorization agreement that Gold Star may require?

According to Gold Star's 2025 Franchise Disclosure Document, Gold Star has the option to require franchisees to enter into and maintain a debit authorization agreement. This agreement allows Gold Star to directly debit the franchisee's bank account for specific charges.

Specifically, the debit authorization agreement can be used by Gold Star to collect Continuing Franchise Fees, Brand Building Fees, and late payment charges. The Continuing Franchise Fee is generally 5% of Gross Sales, but may be 4% for Special Purpose Outlets. The Brand Building Fee amount is determined by Gold Star, but cannot increase by more than 1% in a 12-month period.

This direct debit arrangement provides Gold Star with a convenient and reliable method for collecting these fees. For the franchisee, it means ensuring sufficient funds are available in the designated bank account to cover these charges when they are due, to avoid insufficient fund fees. While Gold Star is not obligated to use this debit authorization agreement, franchisees should be prepared to comply with this requirement if Gold Star chooses to implement it.