Are transfers by devise or inheritance subject to the same conditions as intervivos transfers for a Gold Star franchise?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
- 13.8 Death or Disability of Person with Controlling Interest.
Upon the death or permanent incapacity of any person with a direct or indirect controlling interest in this franchise or in FRANCHISEE, and upon the dissolution of a FRANCHISEE that is a partnership, limited liability company, or corporation, or the death or permanent incapacity of a FRANCHISEE that is a natural person, the executor, administrator, personal representative or trustee of such person or entity shall transfer his or its interest to a third party approved by the COMPANY within six (6) months.
Such Transfer, including, without limitation, transfers by devise or inheritance, shall be subject to the same conditions of this Section 13 as an intervivos Transfer.
However, in the case of Transfer by devise or inheritance, if the heirs or devisees of any such person are unable to meet the conditions in Section 13.4, the personal representative of the deceased FRANCHISEE shall have a reasonable time to dispose of the decedent's interest in the franchise, which disposition shall be subject to all applicable terms and conditions for transfers contained in this Agreement.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, transfers of a franchise due to death or incapacity are generally subject to the same conditions as regular, 'intervivos' transfers. This means that if a Gold Star franchisee passes away or becomes incapacitated, the transfer of the franchise to an heir or another party is treated similarly to a sale or transfer made during the franchisee's lifetime.
Specifically, the executor, administrator, personal representative, or trustee of the deceased or incapacitated person must transfer the interest to a third party approved by Gold Star within six months. This transfer is subject to the same conditions outlined in Section 13 of the franchise agreement, which likely includes requirements such as Gold Star's approval of the transferee, execution of a new franchise agreement, and payment of a transfer fee.
However, there is an exception: if the heirs or devisees are unable to meet the standard transfer conditions in Section 13.4, the personal representative has a reasonable time to dispose of the deceased's interest in the franchise, subject to all applicable terms and conditions for transfers contained in the Agreement. This provides some flexibility in cases where the heirs may not be qualified or willing to take over the franchise themselves. Prospective Gold Star franchisees should carefully review Section 13 of the franchise agreement to fully understand the conditions applicable to all franchise transfers, including those resulting from death or incapacity.