What is required of all Principals of a Gold Star franchisee upon execution of the franchise agreement?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
d to pass before the notice becomes effective has expired.
- 17. PARTNERSHIP AND CORPORATE FRANCHISEES. If FRANCHISEE, or any successor thereof, is a partnership, limited liability company or corporation:
- 17.1 Duty to Inform Company. Upon the execution of this Agreement and upon each Transfer of an interest in this Agreement or in FRANCHISEE and at any other time upon the COMPANY's request, FRANCHISEE shall furnish the COMPANY with a certified list of all its Principals, showing the percentage interest of each, and a list of all officers, managers and directors. A copy of the Certified Listing of all Partners/Members/Shareholders/Other Holders form to be used for this purpose is attached to this Agreement as Exhibit D.
- 17.2 Personal Guaranty. Upon the execution of this Agreement and upon each Transfer of an interest in this franchise or in FRANCHISEE, all Principals of FRANCHISEE shall execute a Personal Guaranty in substantially the form of Exhibit C attached hereto, personally guaranteeing, jointly and severally with all other guarantors, the full payment of all monies due and owing and performance
of all FRANCHISEE's other obligations hereunder, and undertake to be bound by Sections 11, 12 and 13 of this Agreement.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, all Principals of a franchisee must execute a Personal Guaranty upon the execution of the Franchise Agreement. This guaranty, which is in the form of Exhibit C, ensures that the Principals are personally guaranteeing the full payment of all monies due and owing, as well as the performance of all the franchisee's other obligations under the agreement. They are jointly and severally liable with all other guarantors.
This requirement is a standard practice in franchising, as it provides Gold Star with additional security and recourse in case the franchisee fails to meet its financial or operational obligations. By signing the Personal Guaranty, the Principals are committing their personal assets to the success of the franchise. This encourages them to actively manage and oversee the business to ensure its compliance and profitability.
Furthermore, Gold Star requires that upon the execution of the Agreement, the franchisee must furnish the company with a certified list of all its Principals, showing the percentage interest of each, and a list of all officers, managers, and directors. A copy of the Certified Listing of all Partners/Members/Shareholders/Other Holders form to be used for this purpose is attached to this Agreement as Exhibit D.