Does the termination or expiration of the Gold Star Franchise Agreement relieve the franchisee of any obligations to the Company existing at the time of termination or expiration?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
- 26. SURVIVAL OF TERMS AND CONDITIONS. The obligations of FRANCHISEE under Sections 11, 12, 16, and 19.3 hereof, and any other FRANCHISEE obligations herein that are stated to, or are of a type that would reasonably, survive or apply beyond termination or expiration of this Agreement, shall survive any termination or expiration of this Agreement; and expiration or termination of this Agreement shall be without prejudice to the rights of the COMPANY against FRANCHISEE thereunder and with respect to other like matters that reasonably would survive the end of a franchise relationship, and shall not relieve FRANCHISEE of any of FRANCHISEE's obligations to the COMPANY existing at the time of expiration or termination.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the expiration or termination of the Franchise Agreement does not relieve the franchisee of obligations to Gold Star that existed at the time of termination or expiration. Certain obligations, such as those related to Sections 11, 12, 16, and 19.3 of the agreement, and any other obligations that would reasonably survive termination, remain in effect. This ensures that franchisees are held accountable for their responsibilities even after the agreement ends.
This provision protects Gold Star's rights and interests by ensuring that franchisees cannot avoid their responsibilities simply by terminating or allowing the agreement to expire. It also specifies that termination or expiration does not prejudice Gold Star's rights against the franchisee regarding matters that would reasonably survive the end of the franchise relationship.
For a prospective franchisee, this means that any outstanding debts, compliance issues, or other obligations to Gold Star must be resolved even if the franchise agreement is no longer in effect. It is important for franchisees to understand and fulfill all their obligations throughout the term of the agreement to avoid potential legal or financial repercussions after termination or expiration.