Does Gold Star require franchisees to assign rebates payable to them from the soft drink supplier to Gold Star?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
approved by Gold Star or otherwise approved by Gold Star. Franchisees, however, are required to assign to Gold Star or its designee all product and/or advertising rebates or allowances received from certain suppliers related to the Franchise (currently assignments are required for our soft drink supplier only). It is Gold Star's current practice to have these assigned payments made to GSCAA for deposit to and use in the Brand Building Fund. Gold Star receives product and/or advertising rebates or allowances from the same suppliers. The terms are the same for Gold Star and the Franchisees. Although not obligated to do so by the Franchise Agreement or any related agreement, it is Gold Star's current practice to transfer the product and/or advertising rebates and allowances Gold Star itself receives from these suppliers to the Brand Building Fund. Approximately $613,262 was received by GSCAA during the year ended December 31, 2024 pursuant to these supplier rebates and advertising allowances for Gold Star and its franchisees (the above information was derived from the books and records of GSCAA). GSCAA does not sell or lease products or services to franchisees or derive revenue from operations but merely receives Brand Building Fees and supplier assignment proceeds and
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 21–25)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, franchisees are required to assign product and advertising rebates or allowances received from certain suppliers to Gold Star or its designee. Currently, this assignment is specifically required for the soft drink supplier. Gold Star's current practice is to have these assigned payments made to GSCAA for deposit to and use in the Brand Building Fund.
Gold Star also receives product and/or advertising rebates or allowances from the same suppliers, with the terms being the same for both Gold Star and its franchisees. While not obligated by the Franchise Agreement, Gold Star's current practice is to transfer the rebates and allowances it receives to the Brand Building Fund as well. During the year ended December 31, 2024, GSCAA received approximately $613,262 pursuant to these supplier rebates and advertising allowances for both Gold Star and its franchisees.
This arrangement allows Gold Star to consolidate purchasing power and potentially negotiate better pricing with suppliers like the soft drink provider. The funds generated from these rebates are then directed to the Brand Building Fund, which is overseen by GSCAA. GSCAA does not sell or lease products or services to franchisees or derive revenue from operations but merely receives Brand Building Fees and supplier assignment proceeds and oversees the Brand Building Fund as Gold Star's designee. This fund is intended to benefit all franchisees through brand-building initiatives.