Are System Standards considered part of the Gold Star Chili franchise agreement?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
5.1 System Standards. FRANCHISEE acknowledges and agrees that every detail of the System is important, not only to FRANCHISEE but also to the COMPANY and other Gold Star Chili franchisees, in order to develop and maintain uniform operating standards, increase the demand for the products and services offered by all franchisees, establish and maintain a reputation for the highest degree of quality, service, cleanliness and customer satisfaction, and to protect the goodwill of all Gold Star Chili franchises. FRANCHISEE further acknowledges and agrees that a fundamental requirement of the System, this Agreement, and other Gold Star Chili franchises is adherence by all franchisees to the uniform specifications, standards, operating procedures and rules prescribed by the COMPANY for the development and operation of the Store, including, without limitation, standards and specifications regarding ingredients, methods of food preparation and service, and weight, quality and dimensions of menu items and other products served in the Store (collectively referred to as "System Standards"). Accordingly, FRANCHISEE will conduct and operate the Business at all times in a manner that will preserve and build the goodwill of all Restaurants and of the COMPANY, will comply with each and every System Standard, as periodically modified and supplemented by the COMPANY in its sole and absolute discretion, and will not deviate from the System Standards during the term of this Agreement. System Standards prescribed from time to time in the Manual or otherwise communicated to FRANCHISEE in writing will constitute provisions of this Agreement as if fully set forth in this Agreement. All references to this Agreement include all System Standards as periodically modified.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the System Standards are considered part of the franchise agreement. The franchise agreement requires franchisees to adhere to the uniform specifications, standards, operating procedures, and rules prescribed by Gold Star for the development and operation of the store. These System Standards include, but are not limited to, standards and specifications regarding ingredients, methods of food preparation and service, and weight, quality and dimensions of menu items and other products served in the store.
Gold Star franchisees must operate their business in a manner that preserves the goodwill of all restaurants and of the company, and they must comply with each System Standard. These standards can be modified and supplemented by Gold Star at its discretion. System Standards prescribed in the Manual or otherwise communicated to the franchisee in writing will constitute provisions of the Franchise Agreement as if fully set forth in the agreement.
This means that a Gold Star franchisee is legally bound to follow all System Standards, and any deviation from these standards during the term of the agreement would be a breach of contract. The franchisee should pay close attention to the Gold Star operations manual and any written communications from Gold Star, as these will define the System Standards that must be followed. Because Gold Star can modify these standards, franchisees must stay informed of any changes to remain compliant with the franchise agreement.