Is the transfer documentation submitted by the Gold Star franchisee to the company subject to the company's right of first refusal?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
Before consummation of a Transfer to any third party, FRANCHISEE shall submit a copy of all Transfer documentation (signed by the parties, but expressly subject to the COMPANY's right of first refusal) to the COMPANY at least thirty (30) days in advance of any proposed consummation or closing date for the COMPANY's review and comparison with the offer previously submitted to it. If there has been a change or changes in the Transfer terms and the COMPANY considers such change or changes material, the COMPANY shall again have the right of first refusal herein provided. The COMPANY's right of first refusal shall be unrestricted and absolute, and the COMPANY shall in all cases have thirty (30) days to consider and act on each offer or any change in terms and conditions of offer.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, before a franchisee can finalize a transfer to a third party, they must submit a copy of all transfer documentation, signed by all parties but still subject to Gold Star's right of first refusal. This documentation must be submitted to Gold Star at least 30 days before the proposed closing date. This allows Gold Star to review the offer and compare it to the one previously submitted.
If Gold Star finds any material changes in the transfer terms, the company has the right to exercise its right of first refusal again. Gold Star's right of first refusal is unrestricted and absolute, and the company has 30 days to consider and act on each offer or any changes to the offer's terms and conditions.
This means that even after finding a buyer and agreeing to terms, a Gold Star franchisee must give the company the opportunity to buy the franchise on the same terms. This protects Gold Star's interests by allowing them to control who enters their franchise system and maintain brand consistency. The franchisee must ensure all transfer documentation is accurate and complete to avoid delays or potential rejection by Gold Star.