Does Gold Star reserve the right to change the Brand Building Fund?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
Gold Star is not obligated by the Franchise Agreement to conduct any advertising for your franchised Restaurant or any other franchised Restaurant. We have nevertheless established the Brand Building Fund, the purpose of which is to conduct advertising and other marketing activities which promote Gold Star's business, products and services under the Marks. Gold Star reserves the right to establish additional advertising funds in addition to the Brand Building Fund, and may change, merge or dissolve the Brand Building Fund and any other future advertising fund in Gold Star's sole discretion. If Gold Star does establish additional advertising funds, Gold Star may require you to pay all or a portion of Brand Building Fees to such fund in accordance with the provisions below.
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 26–36)
What This Means (2025 FDD)
According to the 2025 Gold Star FDD, Gold Star has broad discretion over the Brand Building Fund, including the right to modify or dissolve it. Specifically, Gold Star reserves the right to establish additional advertising funds in addition to the Brand Building Fund. Gold Star may change, merge, or dissolve the Brand Building Fund and any other future advertising fund at its sole discretion. If Gold Star establishes additional advertising funds, it may require franchisees to pay all or a portion of Brand Building Fees to such funds.
This level of control means that Gold Star franchisees must be prepared for potential changes in how advertising funds are managed and allocated. While a Franchisee Advisory Council advises GSCAA on advertising policies, Gold Star ultimately has the power to form, dissolve, or change the Council, and the Council's role is purely advisory without any decision-making power. This structure concentrates control over advertising strategies and fund usage with Gold Star.
For a prospective franchisee, this highlights the importance of understanding Gold Star's vision for marketing and advertising. While the FDD outlines the current usage of the Brand Building Fund, Gold Star's ability to alter the fund's structure and allocation means that future strategies could shift. Franchisees should inquire about Gold Star's long-term marketing plans and how they can expect the Brand Building Fund to evolve over time. Understanding these potential changes is crucial for assessing the value and effectiveness of the advertising support they will receive as franchisees.