How are transfers of ownership interests aggregated to determine if a Change-in-Control has occurred for a Gold Star franchise?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
A "Change-in-Control" transaction or series of transactions shall occur when 50% or more of the voting power of FRANCHISEE is vested in a person or persons (as applicable) different from the person or persons (as applicable) with whom 50% of voting power was vested immediately prior to the transaction or series of transactions.
For purposes of this subparagraph, all transfers of an ownership interest in a nonindividual franchisee occurring since the date the entity first became a franchisee will be aggregated to determine whether a Change-in-Control has occurred.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, when a franchisee is not an individual, all transfers of ownership interest are aggregated from the date the entity first became a franchisee to determine if a Change-in-Control has occurred.
A Change-in-Control is defined as when 50% or more of the voting power of the franchisee is vested in a person or persons different from those who held 50% of the voting power immediately before the transaction or series of transactions.
This aggregation rule means that even if no single transfer exceeds the 50% threshold, multiple smaller transfers over time can collectively trigger a Change-in-Control, requiring Gold Star's approval. This provision is designed to ensure that Gold Star maintains control over who its franchisees are and that any significant shifts in ownership are subject to their review and consent. Franchisees need to be aware of this aggregation rule when considering any transfer of ownership interests in their business.