Under what condition will the Gold Star franchise agreement terminate if the lease ends?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
If FRANCHISEE's lease, or any extension or renewal thereof, terminates during the term of this Agreement due to any fault of FRANCHISEE, this Agreement shall terminate at the option of the COMPANY upon written notice from the COMPANY.
- 1.6 Permitted Activities. FRANCHISEE shall engage at the Retail Location only in the business of operating the Store and only pursuant to the System and this Agreement. FRANCHISEE shall not engage in the Business at any other location, provided that FRANCHISEE shall be permitted to make delivery orders with its own employees in the Protected Territory so long as FRANCHISEE abides by COMPANY's policies and procedures then in effect with respect to delivery services. FRANCHISEE shall not manufacture, sell, advertise for sale, provide or give away any products or services at the Retail Location other than the products and services designated or approved from time to time by the COMPANY in the Manual or otherwise in writing (collectively the "Products"). The conditions expressed herein are for the purpose of ensuring quality control and uniformity.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the franchise agreement can be terminated if the franchisee's lease terminates due to any fault of the franchisee. In this case, Gold Star has the option to terminate the agreement by providing written notice to the franchisee.
This condition emphasizes the importance of maintaining a secure and compliant lease for the duration of the franchise agreement. If a franchisee fails to meet their lease obligations, leading to termination, Gold Star can end the franchise agreement. This protects Gold Star from potential disruptions or damages to its brand and operations that could arise from a poorly maintained or insecure location.
For a prospective Gold Star franchisee, this means carefully managing the lease agreement and ensuring compliance with all its terms. It would be prudent to have legal counsel review the lease to fully understand the obligations and potential pitfalls. Additionally, maintaining a positive relationship with the landlord and promptly addressing any lease-related issues is crucial to avoid jeopardizing the franchise agreement.
It is also important to note that if the lease terminates through no fault of the franchisee, the franchisee may apply to relocate the store to another location. However, Gold Star is not obligated to grant approval for relocation.