Under what circumstances does Gold Star have the option to purchase a franchisee's business?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in | Summary |
|---|---|---|
| Franchise Agreement | ||
| o. Gold Star’s option to purchase your business | Sections 15.2 and 15.3 and the Small Business Association Addendum if Applicable | Gold Star has option to acquire Retail Location (or lease), equipment and furnishings upon termination or expiration of Franchise Agreement or permanent closing of Retail Location; Under the Small Business Association Addendum Gold Start does not have the right to acquire the Retail Location |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 42–45)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, Gold Star has the option to purchase a franchisee's business under specific circumstances. Gold Star can acquire the Retail Location (or its lease), equipment, and furnishings if the Franchise Agreement terminates or expires. This also applies if the franchisee permanently closes the Retail Location.
However, there's an exception under the Small Business Association Addendum. If this addendum applies, Gold Star does not have the right to acquire the Retail Location. This suggests that the applicability of Gold Star's purchase option depends on the specific agreements and addenda in place for each franchise.
Prospective franchisees should carefully review their Franchise Agreement and any associated addenda, particularly the Small Business Association Addendum, to understand whether Gold Star has the option to purchase their business upon termination, expiration, or closure. It is important to clarify which assets are subject to the purchase option (e.g., the retail location, lease, equipment) and the terms of valuation and payment in such a scenario.