What was the total cost for restoration of the Hartwell Gold Star franchise after the fire?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
Ohio 45216 (the "Property").
On October 9, 2021, there was a fire at the Property that resulted in a total loss of the Hartwell Gold Star. After the fire, the defendants ceased operating, never rebuilt, and retained insurance proceeds which were to be used to rebuild, the Hartwell Gold Star. Defendant 21 Partners was issued a check for $157,990.41 for replacement of furniture, fixtures, and equipment, but never provided Gold Star with these proceeds, despite having a contractual obligation to do so. Defendant 21 Partners provided Gold Star with building replacement insurance proceeds totaling $455,642.92, but the total cost for restoration is $1,106,670.00, a cost for whi
Source: Item 3 — Litigation (FDD pages 10–11)
What This Means (2025 FDD)
According to the 2025 Gold Star Franchise Disclosure Document, the total cost for the restoration of the Hartwell Gold Star franchise after a fire was $1,106,670.00. This figure is mentioned in the context of a legal dispute between Gold Star and one of its franchisees, 21 Partners Group LLC, and its owner, Rasem Daoud. The dispute arose after a fire at the Hartwell Gold Star location on October 9, 2021, which resulted in a total loss.
Following the fire, insurance proceeds were issued to 21 Partners, including $157,990.41 for the replacement of furniture, fixtures, and equipment, and $455,642.92 for building replacement. However, Gold Star claims that the total cost to restore the Hartwell Gold Star location amounted to $1,106,670.00, and the franchisee is responsible for covering the difference. The lawsuit was initiated to resolve the issue of the unpaid restoration costs and the franchisee's alleged failure to rebuild the location and remit the insurance proceeds to Gold Star.
This situation highlights the importance of franchisees maintaining adequate insurance coverage and adhering to their contractual obligations regarding the use of insurance proceeds. It also demonstrates the potential for disputes between Gold Star and its franchisees over financial responsibilities in the event of unforeseen circumstances such as a fire. Prospective franchisees should carefully review the insurance requirements and other financial obligations outlined in the Franchise Agreement to understand their responsibilities and potential liabilities.