Can Gold Star solicit customers from a Gold Star franchisee's Protected Territory?

According to the 2025 Gold Star FDD, franchisees are permitted to solicit customers from any geographic area. Gold Star, its affiliates, and other franchisees also retain the right to solicit customers or accept orders from any location, including a franchisee's protected territory. This means that while a franchisee may have a protected territory, Gold Star and other franchisees are not restricted from marketing to or accepting orders from customers within that territory.

This aspect of the franchise agreement highlights a potential risk for franchisees. While a protected territory offers some level of geographic exclusivity, it does not guarantee that the franchisee will be the sole entity pursuing customers in that area. Gold Star retains the right to establish Special Purpose Outlets within the Protected Territory and to sell or distribute Gold Star products through alternative channels of distribution.

This could lead to increased competition within the franchisee's territory, potentially impacting their sales and profitability. A prospective franchisee should carefully consider this aspect and evaluate the potential impact of competition from Gold Star and other franchisees within their protected territory. It is important to understand Gold Star's plans for establishing company-owned outlets or alternative distribution channels in the area.

Prospective franchisees should inquire about Gold Star's specific strategies for marketing and distribution within protected territories to fully understand the competitive landscape. Understanding the potential for competition from the franchisor and other franchisees is crucial for assessing the viability and potential profitability of a Gold Star franchise.