Does Gold Star require approval for a franchisee's transfer of the franchise?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in | Summary |
|---|---|---|
| Franchise Agreement | ||
| k. “Transfer” by you - | Section 13.2 | Includes transfer of contract or assets, certain ownership |
| definition | changes, grant of liens | |
| l. Gold Star’s approval of transfer by Franchisee | Section 13.4 and the Small Business Association Addendum if applicable | Gold Star has the right to approve all transfers (also see (n) below) |
| m. Conditions for Gold Star approval of transfer | Section 13.4 and the Small Business Association Addendum if applicable | Gold Star not obligated to approve any transfer--minimum conditions include: you are in good standing; new franchisee qualifies; transfer fee paid; purchase agreement approved; training arranged; release signed by you (and your shareholders and partners) and current agreement and related documents signed by new franchisee (also see (n) and (r), below); Under the Small Business Association Addendum, Gold Star may not unreasonably withhold, condition, or delay its consent. |
| n. Gold Star’s right of first | Section 13.3 | Gold Star can match any offer |
| refusal to acquire your | ||
| business |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 42–45)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, Gold Star maintains the right to approve all franchise transfers. The FDD outlines that 'transfer' includes not only the transfer of the franchise agreement itself but also the transfer of assets, certain ownership changes, and the granting of liens.
For a Gold Star franchisee seeking to transfer their franchise, several conditions must be met to gain approval from Gold Star. These minimum conditions include the franchisee being in good standing with Gold Star, the proposed new franchisee meeting Gold Star's qualifications, payment of a transfer fee, approval of the purchase agreement by Gold Star, arrangement of training for the new franchisee, and the signing of a release by the current franchisee (and their shareholders and partners). The new franchisee must also sign the current franchise agreement and related documents.
However, the FDD also notes an exception under the Small Business Association Addendum, stating that Gold Star may not unreasonably withhold, condition, or delay its consent to a transfer if that addendum applies. Gold Star also retains the right of first refusal, meaning they can match any offer made by a potential buyer to acquire the franchisee's business.
Prospective franchisees should carefully review Section 13 of the Franchise Agreement and any applicable addenda to fully understand the conditions and limitations surrounding franchise transfers. Consulting with a legal advisor is recommended to navigate these provisions and understand their rights and obligations.