Does the restriction on transfer of interest in a Gold Star franchise apply to transfers by will?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
INTEREST.**
- 13.1 Assignment by Company. This Agreement shall inure to the benefit of the COMPANY and its successors and assigns. The COMPANY may sell, transfer or assign this Agreement and any rights or duties hereunder to any third party at any time, and upon the giving of written notice to FRANCHISEE of any such transfer, COMPANY will have no further responsibility for the performance of any of the transferred obligations. FRANCHISEE shall execute any forms that the COMPANY may reasonably require in connection with any transfer or assignment by the COMPANY.
- 13.2 No Assignment by Franchisee. The COMPANY has granted this franchise in reliance on the individual or collective character, skill, aptitude and business and financial capacity of FRANCHISEE and its Principals. Accordingly, neither FRANCHISEE nor any person with an interest in FRANCHISEE shall (directly or indirectly, contingently, voluntarily, involuntarily, by contract, by will, by merger or consolidation, by transfer or issuance of stock, membership or partnership interests, by operation of law or otherwise), without the prior written consent of the COMPANY, sell, assign, transfer, convey, issue, lease, pledge, mortgage, encumber or make any disposition of in any manner (collectively, "Transfer"), or permit the Transfer of, or publicly advertise or offer any Transfer of, all or any part of any of the following or any interest therein (collectively the "Restricted Assets"): this Agreement, the Business, the Store, the Retail Location (whether owned or leased), any Lease, any interest or share in FRANCHISEE which results in a Change-in-Control (defined below), or all or a material part of the assets, real or personal, tangible or intangible, pertaining to the Store or the Business.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the restrictions on transferring interest in the franchise do apply to transfers by will. Specifically, the franchise agreement states that neither the franchisee nor any person with interest in the franchisee can transfer any part of the agreement, the business, the store, or any interest in the franchisee without prior written consent from Gold Star. This restriction includes transfers made "by will".
Furthermore, upon the death or permanent incapacity of someone with a controlling interest in the franchise, the executor, administrator, personal representative, or trustee must transfer the interest to a Gold Star-approved third party within six months. This transfer is subject to the same conditions as any other transfer, including transfers by devise or inheritance.
However, if the heirs or devisees are unable to meet the standard transfer conditions, the personal representative has a reasonable time to dispose of the decedent's interest, but this disposition remains subject to all applicable transfer terms in the agreement. This means that even in the event of death, Gold Star retains significant control over who can become a franchisee and ensures that all potential franchisees meet their standards.