What does the renewal fee replace for a Gold Star franchise?
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, when a franchisee renews their agreement, they must pay a renewal fee. This renewal fee, as stated in section 16.1.8, is paid instead of the initial franchise fee that would otherwise be required under the new franchise agreement.
In practical terms, this means that a renewing franchisee does not have to pay the full initial franchise fee again. Instead, they pay a smaller renewal fee. According to section 8.1.4, the renewal fee is $5,000. This is a significant benefit for existing franchisees, as the initial franchise fee for a new restaurant can be $50,000, $25,000, or $10,000, depending on the franchisee's existing agreements with Gold Star.
However, it's important to note that while the renewal fee replaces the initial franchise fee, the franchisee will still be subject to the terms of Gold Star's then-current franchise agreement. Section 16.1.7 states that the terms of the new franchise agreement may differ materially from the original agreement, potentially including higher continuing franchise fees, advertising expenditures, or other charges. Therefore, franchisees should carefully review the new agreement before renewing.