Is the Gold Star renewal fee in addition to the initial franchise fee?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
16.1.8 At the time of execution of the new franchise agreement pursuant to subsection 16.1.7 above, FRANCHISEE delivers to the COMPANY the then current renewal fee by certified check, such renewal fee to be in lieu of the initial franchise fee required under the new franchise agreement.
8.1.4 If FRANCHISEE is entering into this Agreement as a renewal of a previous franchise agreement between FRANCHISEE and the COMPANY, a renewal fee of Five Thousand Dollars ($5,000.00).
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the renewal fee is paid instead of the initial franchise fee when renewing a franchise agreement. Specifically, if a franchisee executes a new franchise agreement, they must deliver the then-current renewal fee to Gold Star by certified check. This renewal fee is explicitly stated to be in place of the initial franchise fee that would otherwise be required under the new franchise agreement. Therefore, a franchisee does not pay both the initial franchise fee and a renewal fee; the renewal fee substitutes for the initial fee.
This arrangement is beneficial for existing Gold Star franchisees because the renewal fee is generally lower than the initial franchise fee. The FDD states that the initial franchise fee for a new restaurant can range from $10,000 to $50,000, depending on the franchisee's existing agreements with Gold Star. In contrast, the renewal fee is $5,000. This represents a significant cost savings for franchisees who choose to renew their agreement rather than start a new franchise.
However, it's important to note that while the initial franchise fee is waived upon renewal, the terms of the new franchise agreement may differ materially from the original agreement. These differences could include higher continuing franchise fees, increased advertising expenditures, different terms, a different protected territory, and other changes. Therefore, franchisees should carefully review the new franchise agreement to understand any changes in their obligations and potential costs before deciding to renew.