For Gold Star, what is the role of the designated distributor(s) in generating revenue?

According to Gold Star's 2025 Franchise Disclosure Document, designated distributors play a role in generating revenue for Gold Star through the sale of non-chili products to franchisees. In addition to revenue from distributors, Gold Star also receives national account marketing funds from soft drink suppliers based on the volume of gallons purchased and promotional opportunities, as well as funds from other supplier partners who offer marketing or rebate funds. These funds may be directed to the GSCAA (Gold Star Chili Advertising Association) for use in the Brand Building Fund at Gold Star's discretion. In 2024, 100% of the rebated marketing funds from soft drink and other partner suppliers were allocated to this fund.

Furthermore, the document states that for the fiscal year ended December 31, 2024, Gold Star's revenues from the sale of products to franchisees or to suppliers who in turn sell these products to franchisees amounted to $4,065,676. This figure represents approximately 16.7% of Gold Star's total revenues, which totaled $24,400,821 for the same period. This indicates that sales to franchisees, either directly or indirectly through suppliers, constitute a notable portion of Gold Star's overall revenue stream.

Gold Star also leverages the collective purchasing power of its franchise network to negotiate favorable pricing with soft drink suppliers. By consolidating purchases from both Gold Star and its franchisees, they qualify as national account customers, which allows them to receive rebates based on the total volume of products purchased annually. Any rebates payable to franchisees are currently required to be assigned to Gold Star. This arrangement benefits both Gold Star and its franchisees by securing better pricing and potentially increasing the funds available for brand building initiatives.