What section of the Gold Star agreement defines default in payment?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.5.1 FRANCHISEE fails to make or cause to make any payment of any Brand Building Fee, continuing franchise fee or other fee or payment due hereunder, and FRANCHISEE fails to cure such failure to pay within 10 days after the COMPANY's written notice thereof;
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to the 2025 Gold Star Franchise Disclosure Document, Section 14.5.1 of the franchise agreement defines default in payment. It states that a franchisee will be in default if they fail to make payments for any Brand Building Fee, continuing franchise fee, or other payment due under the agreement, and they fail to correct this non-payment within 10 days after receiving written notice from Gold Star.
This section is important for prospective franchisees as it clearly outlines the consequences of failing to meet payment obligations. Franchisees must ensure they have sufficient financial resources to cover all fees and payments required by the franchise agreement. The 10-day cure period provides a limited window to rectify any payment issues and avoid further action by Gold Star.
In addition to payment defaults, Section 14.5 lists other conditions that can lead to a franchisee being in default, such as breaching the franchise agreement, failing to meet quality standards, failing inspections, defaulting on lease agreements, failing to open the store on time, or violating laws and regulations. Franchisees should carefully review all these conditions to understand their obligations and avoid potential defaults.