Can Gold Star require the FRANCHISEE to use a specific broker for Retail Location selection?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
- 4.2 Conventional Approval of Retail Location. In the event that the Retail Location has not been approved concurrently with the execution hereof, then FRANCHISEE must promptly identify one or more proposed Retail Locations, and, within six (6) months of the date hereof, obtain the COMPANY's written approval of the site of a Retail Location and any lease therefor. The COMPANY may require FRANCHISEE to use a master broker and/or local broker approved by or designated by the COMPANY in connection with the selection of a Retail Location.
- 4.3 Approval of Lease. If FRANCHISEE intends to occupy the Retail Location under a lease, sublease, or other contract of tenancy (collectively, the "Lease"), any such Lease (and any amendment, renewal or extension thereof) must be approved by the COMPANY prior to its execution. The COMPANY's approval of the Lease may be conditioned upon the inclusion of such provisions as the COMPANY reasonably requires, including without limitation, those provisions set forth on Exhibit B attached hereto.
- 4.4 Use of Leasing Counsel. The COMPANY may, at its discretion, at any time prior to its approval of the Lease, require FRANCHISEE to engage attorneys of the COMPANY's choosing to advise FRANCHISEE and negotiate the terms of the Lease. The expenses of such leasing attorneys shall be the sole responsibility of FRANCHISEE.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, if the retail location has not been approved concurrently with the execution of the franchise agreement, the franchisee must promptly identify one or more proposed retail locations. Within six months of the agreement date, the franchisee needs to obtain Gold Star's written approval for the site and any associated lease.
Gold Star may require the franchisee to use a master broker or a local broker that is either approved or designated by Gold Star in connection with selecting a retail location. This means that a prospective franchisee might not be able to use their preferred broker and must instead work with someone pre-approved by Gold Star.
Furthermore, if the franchisee intends to occupy the retail location under a lease, Gold Star's approval of the lease is required before it is executed. This approval may be conditional, requiring specific provisions in the lease as deemed necessary by Gold Star. Gold Star may also require the franchisee to engage attorneys of Gold Star's choosing to advise and negotiate the lease terms, with the franchisee bearing the expenses of these attorneys. This gives Gold Star significant control over the site selection and lease negotiation process, potentially adding costs for legal counsel chosen by Gold Star.