What right does Gold Star have regarding a potential alternative supplier's facilities?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
If FRANCHISEE desires to purchase from a source that is not on the COMPANY's then current approved supplier list for the item desired to be purchased, or to obtain approval to offer merchandise or services or use items that are not on the COMPANY's then current list of approved Products, FRANCHISEE shall submit to the COMPANY a written request for approval in accordance with the procedures then prescribed by the COMPANY for submission of requests for approval of products and suppliers.
The COMPANY shall have the right to require that its representatives be permitted to inspect the source's facilities, that samples from the source be submitted to the COMPANY or its designee for testing and evaluation and that FRANCHISEE pay the COMPANY a charge not to exceed the reasonable cost of the inspection and the actual cost of testing or other evaluation.
The COMPANY shall notify FRANCHISEE in writing within a reasonable time, not to exceed sixty (60) days, after receipt of FRANCHISEE's request and samples, whether such approval is granted.
The COMPANY reserves the right to reinspect facilities and items from time to time.
The COMPANY may revoke approval of any source or item that does not continue to meet any of the COMPANY's then current criteria.
The COMPANY shall not be required to approve any particular supplier or item.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, if a franchisee wants to buy from a supplier not already approved by Gold Star, the franchisee must request approval from Gold Star. Gold Star has the right to inspect the potential supplier's facilities.
Gold Star can require its representatives to inspect the facilities of the alternative supplier. Gold Star can also request samples from the potential supplier for testing and evaluation. The franchisee is responsible for covering the costs associated with the inspection and the actual cost of testing or evaluation.
Gold Star will then notify the franchisee in writing whether the approval is granted or denied within a reasonable timeframe, not exceeding 60 days, after receiving the franchisee's request and samples. Gold Star also retains the right to reinspect facilities and items periodically and may revoke approval if a source or item no longer meets Gold Star's current criteria. Gold Star is not obligated to approve any specific supplier or item.
This process ensures that Gold Star maintains control over the quality and standards of products used in its restaurants, even if a franchisee seeks alternative suppliers. It protects the brand's reputation and ensures consistency across all franchise locations. Franchisees should factor in these potential costs and time delays when considering alternative suppliers.