Does Gold Star have any restrictions on assigning the Gold Star franchise agreement?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
franchise and related agreements. You should read all these provisions in the agreements attached to this disclosure document.**
THE FRANCHISE RELATIONSHIP
| Provision | Section in | Summary | |
|---|---|---|---|
| Franchise Agreement | |||
| a. Term of the Franchise | Section 1.2 | 10 years or, if less, term of lease for Retail Location |
| h. “Cause” defined— Sections | 14.2, | 14.3, | Non-curable defaults: | financial problems | of you, your | |---|---|---|---|---|---|
| Provision | Section in | Summary |
|---|---|---|
| Franchise Agreement | ||
| i. Your obligations on termination/nonrenewal | Section 15 | Obligations include complete deidentification; payment of amounts due; return of proprietary and other confidential items, as well as all inventory and equipment bearing the Marks; transfer of phone listings and numbers; confidentiality obligations; indemnity obligations (also see (o) and (r), below) |
| j. Assignment of contract | Section 13.1 | No restriction on Gold Star's right to assign |
| by Gold Star | ||
| k. “Transfer” by you - | Section 13.2 | Includes transfer of contract or assets, certain ownership |
| definition | changes, grant of liens | |
| l. Gold Star’s approval of transfer by Franchisee | Section 13.4 and the Small Business Association Addendum if applicable | Gold Star has the right to approve all transfers (also see (n) below) |
| m. Conditions for Gold Star approval of transfer | Section 13.4 and the Small Business Association Addendum if applicable | Gold Star not obligated to approve any transfer--minimum conditions include: you are in good standing; new franchisee qualifies; transfer fee paid; |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 42–45)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, Gold Star does not restrict its own right to assign the franchise agreement. However, franchisees face several conditions if they want to transfer their franchise agreement.
The FDD states that Gold Star has the right to approve all transfers. Gold Star is not obligated to approve any transfer, but minimum conditions include that the franchisee is in good standing, the new franchisee qualifies, a transfer fee is paid, the purchase agreement is approved, training is arranged, and a release is signed by the franchisee (and their shareholders and partners). The new franchisee must also sign the current agreement and related documents.
Gold Star also has the right of first refusal to acquire the franchisee's business, meaning they can match any offer made by a potential buyer. Additionally, all holders of an interest in the franchise must guarantee all of the franchisee's obligations under the Franchise Agreement and agree to be bound personally by the confidentiality, noncompete, and transfer provisions of the Franchise Agreement.