When transferring a Gold Star franchise, is the transferee required to pay an initial franchise fee?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
he transferee will enter into a written assumption, in a form satisfactory to the COMPANY, assuming and agreeing to discharge all of
- FRANCHISEE's obligations under this Agreement prior to and after the date of assumption;
- 13.4.5 The transferee shall have paid the COMPANY its then-current transfer fee. The amount of the transfer fee shall be set by the COMPANY from time to time in the exercise of its absolute discretion. The transfer fee as of the date of this Agreement, but subject to change, is Three Thousand Five Hundred Dollars ($3,500.00).
- 13.4.6 The transferee shall have executed the COMPANY's then-current form of franchise agreement for a term equal to the remaining current term of this Agreement, save and except that there shall be no initial franchise fee payable, and the transferee shall execute such other agreements and documents as the COMPANY may reasonably require.
- 13.5 Exceptions to Transfer Restrictions.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, a transferee is not required to pay an initial franchise fee when transferring a franchise. The transferee must execute the company's current franchise agreement for a term equal to the remaining term of the original agreement. However, the agreement specifies that no initial franchise fee is payable in this situation.
While the initial franchise fee is waived, the transferee is required to pay a transfer fee. As of the date of the Franchise Agreement, the transfer fee is $3,500.00, but this amount is subject to change at Gold Star's discretion. The transferee must also meet Gold Star's current requirements for new operators, including demonstrating good moral character, satisfactory credit ratings, acceptable business qualifications, and successful completion of training programs.
In addition to paying the transfer fee and meeting the standard requirements, the transferee must also enter into a written agreement assuming all of the franchisee's obligations under the original agreement. This ensures that all responsibilities and liabilities associated with the franchise are transferred to the new operator. This comprehensive process ensures that the new franchisee is well-prepared and qualified to maintain the standards of the Gold Star brand.