Under what circumstances does Gold Star have the option to purchase a Gold Star 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 related to the termination or expiration of the Franchise Agreement, or the permanent closing of the retail location.
Specifically, Gold Star has the option to acquire the retail location (or its lease), along with the equipment and furnishings, if the Franchise Agreement is terminated or expires. This also applies if the franchisee permanently closes the retail location. This provision allows Gold Star to maintain control over the location and assets, potentially to ensure continued operation of a Gold Star restaurant at that site.
However, there is 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 terms of the SBA addendum take precedence over the standard franchise agreement in this particular aspect. Prospective franchisees should carefully review any addenda to understand how they might modify the standard terms.