What are 'Special Purpose Outlets' that Gold Star may establish within a Protected Territory?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
Your Franchise is limited to the operation of 1 Gold Star Restaurant at a specific Retail Location, which must be approved by Gold Star. We agree not to operate or license another to operate a Gold Star Restaurant in a territory we designate in your Franchise Agreement (your "Protected Territory"), subject to our right to establish certain "Special Purpose Outlets" in the Protected Territory and to sell or distribute Gold Star products using the Marks through alternate distribution channels in the Protected Territory. A "Special Purpose Outlet" is a Gold Star Restaurant located inside a shopping mall or center, zoo, airport, race track, amusement park, fairgrounds, sports stadium, hospital, factory, bar, school, gas station, and special event. You are not granted (nor should you infer) any exclusive, protected, or territorial rights of any kind whatsoever outside of the Protected Territory, including any contiguous market area.
The size of your Protected Territory depends primarily upon the location of your Restaurant. The Protected Territory for a Special Purpose Outlet will be the relevant building or facility. The Protected Territory boundaries for other Restaurants are those set forth in Franchisees' Franchise Agreements. In determining Protected Territory boundaries, Gold Star evaluates a number of factors, including density of the population, earnings of the populace, and traffic counts.
Source: Item 12 — Territory (FDD pages 36–37)
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. Gold Star retains the right to establish these Special Purpose Outlets within a franchisee's protected territory.
This means that while a franchisee is granted a protected territory, Gold Star can still open additional locations within that territory if they are within one of the specified "Special Purpose Outlet" venues. This could potentially lead to competition for the franchisee from another Gold Star location within their protected territory. However, if the Retail Location is a Special Purpose Outlet, Gold Star will not operate or license another to operate an additional Restaurant in the same building as the Special Purpose Outlet.
Prospective franchisees should be aware of this clause and consider the potential impact of Special Purpose Outlets on their business. It is important to understand the specific boundaries of the protected territory and the likelihood of Gold Star establishing a Special Purpose Outlet nearby. Franchisees may want to inquire about Gold Star's plans for establishing Special Purpose Outlets in the area and negotiate the terms of the franchise agreement to mitigate potential competition.