Does Gold Star's right to appoint a receiver limit other rights or remedies?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
he purchase of assets under Section 15.2 above.
- 15.4 No Right to Use Marks. As agreed to in Section 6 of this Agreement, all rights to any Marks, patents and copyrights licensed hereunder belong to the COMPANY exclusively, and upon expiration or termination of this Agreement, the COMPANY may, if FRANCHISEE does not do so, execute in FRANCHISEE's name, at FRANCHISEE's expense and on FRANCHISEE's behalf any and all documents necessary to end and cause the discontinuance immediately of FRANCHISEE's use of or right to use the Marks, patents and copyrights and the COMPANY is hereby irrevocably appointed and designated as FRANCHISEE's attorney-in-fact to do so.
- 15.5 Right of Entry; Appointment of Receiver. If FRANCHISEE is in default under the terms of this Agreement, in addition to the COMPANY's right to terminate this Agreement, and without limiting any other rights or remedies to which the COMPANY may be entitled at law or in equity, the COMPANY will have the right to take any of the following actions:
- 15.5.1 enter upon the premises of the Franchised Restaurant and exercise complete authority with respect to the operation of the Store until such time as the COMPANY determines, in its sole discretion, that FRANCHISEE has cured the default and that there is compliance with the terms of this Agreement; and FRANCHISEE agrees that a designated representative of the COMPANY may operate and control the Store, and that FRANCHISEE will pay the COMPANY for its labor costs, travel expenses, lodging and other expenses reasonably incurred by the - COMPANY in sending a representative to enforce compliance with the terms of this Agreement; or
- 15.5.2 petition any court of competent jurisdiction to appoint a receiver for the business or assets of FRANCHISEE, and FRANCHISEE agrees that it will not contest any proceeding or petition for the appointment of a receiver.
- 15.6 Liquidated Damages.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to the 2025 Gold Star Franchise Disclosure Document, Gold Star's right to appoint a receiver does not limit other rights or remedies. Specifically, if a franchisee defaults under the terms of the Franchise Agreement, Gold Star has the right to petition any court to appoint a receiver for the business or assets of the franchisee. The franchisee agrees they will not contest this action.
In addition to the right to seek a receiver, Gold Star retains other rights and remedies at law or in equity. These include the right to enter the franchised restaurant and operate the store until the default is cured, as determined by Gold Star in its sole discretion. The franchisee is responsible for covering Gold Star's labor costs, travel expenses, lodging, and other expenses incurred while enforcing compliance.
Furthermore, Gold Star is entitled to apply for a court order to stop any breach or threatened breach of the agreement. They can also seek specific performance enforcing the agreement's provisions. If the agreement is terminated, the franchisee may be prevented from continuing to operate the store or any other operation that violates the agreement. These remedies are available to Gold Star without needing to post any bond or security.
This comprehensive set of rights and remedies ensures that Gold Star can take swift and decisive action to protect its brand and system in the event of a franchisee default, without being limited by the appointment of a receiver. The franchisee essentially waives their right to challenge the appointment of a receiver, making it a more readily available option for Gold Star.