What resolutions must a Gold Star franchisee submit to the company upon execution of the Franchise Agreement?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
- 17.3 Governance Documents. The partnership agreement, articles of incorporation, articles of organization, operating agreement, bylaws and other organization documents of FRANCHISEE shall recite that the issuance and transfer of any interest therein is restricted by the terms of Section 13 of the Agreement. FRANCHISEE shall also submit to the COMPANY, upon the execution of this Agreement, resolutions from the applicable governing body of FRANCHISEE which authorize the execution, delivery and performance of this Agreement and the transactions contemplated hereby and states, in form and substance, that no shares or other interest in FRANCHISEE shall be issued, transferred or assigned to any person or legal entity except according to the terms 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, if the franchisee is a legal entity such as a partnership, corporation, or limited liability company, they must submit specific resolutions to Gold Star upon executing the Franchise Agreement. These resolutions must be from the franchisee's governing body, such as its board of directors or partners.
The resolutions need to authorize the execution, delivery, and performance of the Franchise Agreement and all transactions related to it. Furthermore, the resolutions must state that no shares or other interests in the franchisee entity will be issued, transferred, or assigned to any person or legal entity, except as explicitly allowed by the terms of the Franchise Agreement. This ensures that control and ownership of the franchise remain within the bounds agreed upon with Gold Star.
This requirement is in place to protect Gold Star's interests by ensuring that the franchisee is properly authorized to enter into the agreement and that there are restrictions on changes in ownership that could affect the operation of the franchise. Prospective franchisees should ensure they understand these requirements and prepare the necessary resolutions with the help of legal counsel to avoid delays in finalizing the franchise agreement.