What are Special Purpose Outlets for Gold Star, and how do they affect the Protected Territory?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding the foregoing, the COMPANY may (x) establish or license another to establish one or more Special Purpose Outlets (as defined below) within the Protected Territory and (y) sell or otherwise distribute within the Protected Territory products similar to or the same as those offered by the Restaurant through alternative channels of distribution (including without limitation grocery and convenience stores and internet, direct mail and catalog sales); provided, however, that in the event that the Retail Location is a Special Purpose Outlet, the COMPANY will not operate or license another to operate an additional Restaurant in the same building as the Special Purpose Outlet.
A "Special Purpose Outlet" is defined as a Gold Star Chili restaurant located inside shopping malls or centers, zoos, airports, race tracks, amusement parks, fairgrounds, sports stadiums, hospitals, factories, bars, schools, gas stations, and special events.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, a "Special Purpose Outlet" is a Gold Star Chili restaurant located inside specific venues. These venues include shopping malls or centers, zoos, airports, race tracks, amusement parks, fairgrounds, sports stadiums, hospitals, factories, bars, schools, gas stations, and special events. These Special Purpose Outlets have a specific impact on a franchisee's protected territory.
Gold Star retains the right to establish or license others to establish Special Purpose Outlets within a franchisee's protected territory. Gold Star can also sell or distribute products similar to those offered by the restaurant through alternative channels, such as grocery stores, convenience stores, internet sales, direct mail, and catalogs, within the protected territory. However, if a retail location is a Special Purpose Outlet, Gold Star will not operate or license another to operate an additional Gold Star restaurant in the same building as the Special Purpose Outlet.
This means that while a franchisee is generally protected from another traditional Gold Star restaurant opening within their defined territory, Gold Star can still operate or license Special Purpose Outlets in locations like malls or airports within that territory. This could potentially impact the franchisee's sales, as these alternative outlets may draw customers away from the traditional restaurant. It is important for prospective franchisees to consider the potential impact of Special Purpose Outlets and alternative distribution channels when evaluating the franchise opportunity and negotiating the terms of their franchise agreement.