Can Gold Star suspend the operation of the Brand Building Fund at any time?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
- 9.3.7 Although the Brand Building Fund is intended to be of perpetual duration, the COMPANY may terminate the Brand Building Fund or suspend its operation at any time. The Brand Building Fund shall not be terminated, however, until all monies in such fund have been expended pursuant to Section 9.3.5.
- 9.3.8 If the Brand Building Fund or any successor fund is suspended or terminated, or whenever the required Brand Building Fee percentage is less than seven percent (7%), the COMPANY may increase the Local Marketing Expenditure to up to seven percent (7%) of FRANCHISEE's Gross Sales; provided, however, that in no event shall the Local Marketing Expenditure, when aggregated with any required Brand Building Fees, exceed in any calendar year seven percent (7%) of FRANCHISEE's Gross Sales for such year).
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, Gold Star may terminate or suspend the operation of the Brand Building Fund at any time. However, the fund cannot be terminated until all monies in the fund have been expended according to section 9.3.5.
If Gold Star suspends or terminates the Brand Building Fund, or if the required Brand Building Fee percentage is less than 7%, Gold Star has the option to increase the Local Marketing Expenditure up to 7% of the franchisee's Gross Sales. However, the combined Local Marketing Expenditure and Brand Building Fees cannot exceed 7% of the franchisee's Gross Sales in any calendar year.
This means that while Gold Star retains control over the Brand Building Fund, franchisees could see adjustments in how their marketing contributions are allocated. Franchisees should be aware that the Brand Building Fund can be altered or discontinued, potentially shifting more responsibility for local marketing onto them, although the total expenditure is capped.