What are the two sources from which Gold Star currently derives revenue from franchisee purchases?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
Gold Star currently derives revenue from (a) the sale of non-chili products by our designated distributor(s) to Franchisees and (b) national account marketing funds from soft drink suppliers based on gallons purchased and promotional opportunities and other supplier partners who offer marketing or rebate funds.
At Gold Star's discretion, these funds may or may not be directed to the GSCAA for use in the Brand Building Fund. 100% of the rebated marketing funds from soft drink and other partner suppliers received during 2024 were allocated to the Brand Building Fund.
Under the current and proposed purchase arrangement with our soft drink supplier, purchases by Gold Star and its Franchisees are consolidated for purposes of determining whether Gold Star and its Franchisees are eligible for the supplier pricing offered generally to national account customers. Gold Star and its Franchisees currently are classified as national account customers through December 31, 2024. The soft drink supplier pays Gold Star and its franchisees rebates based on the consolidated volume of purchased products per year. Gold Star currently requires any such rebates payable to franchisees to be assigned to Gold Star (See Item 6, Note 5).
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 21–25)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, Gold Star derives revenue from franchisee purchases from two sources. First, Gold Star receives revenue from the sale of non-chili products by their designated distributor(s) to franchisees. Second, Gold Star receives national account marketing funds from soft drink suppliers based on gallons purchased, promotional opportunities, and other supplier partners who offer marketing or rebate funds.
These funds may or may not be directed to the GSCAA (Gold Star Chili Advertising Association) for use in the Brand Building Fund, at Gold Star's discretion. In 2024, 100% of the rebated marketing funds from soft drink and other partner suppliers were allocated to the Brand Building Fund.
Gold Star and its franchisees are classified as national account customers through December 31, 2024, under the current and proposed purchase arrangement with their soft drink supplier. The soft drink supplier pays rebates to Gold Star and its franchisees based on the consolidated volume of purchased products per year. Gold Star requires franchisees to assign any such rebates payable to them to Gold Star.