What is the role of Gold Star in the Gold Star Chili Advertising Association (GSCAA)?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
Special Purpose Outlet is 4% of Gross Sales.
Note 3: Gold Star Currently has designated Gold Star Chili Advertising Association, an Ohio nonprofit corporation ("GSCAA"), to oversee the franchisee Brand Building fund (the "Brand Building Fund"). Gold Star is the sole member of GSCAA, and a majority of GSCAA's current board of trustees are officers, directors, employees or shareholders of Gold Star. Brand Building Fees are imposed by Gold Star under the Franchise Agreement. The Brand Building Fund does not itself impose fees. All Brand Building Fees are nonrefundable; however, when a Franchisee opening a new Restaurant reviews and approves the New Restaurant Opening Marketing Plan, it is the current practice for those expenses (currently, at least $15,000) to be funded by GSCAA and the Franchisee to reimburse their portion in the amount of $10,000, the remainder funded by GSCAA. In addition, it is currently the practice for Gold Star to spend $10,000 of Brand Building Fees on advertising and support to a Franchisee who "re-opens" a Restaurant that it has spent more than $50,000 remodeling and invoice the Franchisee for their contribution in the amount of $5,000 for grand re-opening marketing and promotion. Neither Gold Star nor G
Source: Item 6 — OTHER FEES (FDD pages 12–18)
What This Means (2025 FDD)
According to the 2025 Gold Star FDD, Gold Star has designated the Gold Star Chili Advertising Association (GSCAA), an Ohio nonprofit corporation, to oversee the franchisee Brand Building fund. Gold Star is the sole member of GSCAA, and a majority of GSCAA's current board of trustees are officers, directors, employees, or shareholders of Gold Star.
In practice, this means that while franchisees contribute to the Brand Building Fund through Brand Building Fees, Gold Star maintains significant control over how those funds are managed and spent. The Brand Building Fund itself does not impose fees; instead, Brand Building Fees are imposed by Gold Star under the Franchise Agreement.
Gold Star also has a practice of assigning product and/or advertising rebates or allowances from certain suppliers to GSCAA for use in the Brand Building Fund, although Gold Star is not obligated to do so and reserves the right to change this practice without notice. Prospective franchisees should be aware that Gold Star has considerable discretion over the Brand Building Fund and GSCAA, which could impact how advertising and marketing efforts are conducted and funded.