Under what conditions can a Gold Star franchisee renew their franchise agreement?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
l not contest any proceeding or petition for the appointment of a receiver.
- 15.6 Liquidated Damages. If FRANCHISEE abandons or discontinues the franchise for any reason prior to the expiration of the term of this Agreement, FRANCHISEE will pay to the COMPANY as liquidated damages and not as a penalty, and in addition to but not in limitation of any other rights and remedies to which the COMPANY is entitled, an amount equal to the average monthly continuing franchise fee payments due from FRANCHISEE during the twelve months preceding the abandonment or discontinuance of the franchise, multiplied by the lesser of twenty-four or the number of months remaining in the term of this Agreement.
16. RENEWAL.
16.1 Renewal Option. Except where applicable state law provides otherwise, FRANCHISEE, unless the franchise is terminated as herein otherwise provided, shall have the option at the expiration of the term of this Agreement to renew the franchise granted hereunder by executing the COMPANY's then-current form of franchise agreement for one additional term of ten (10) years unless a different number of renewal terms and/or a different length of such term(s) are set forth on the cover page of this Agreement, which if applicable, the cover page terms shall prevail over the conflicting terms of this section 16 (provided that the COMPANY is then still offering franchises for Restaurants using the Marks and the System and provided that such form of franchise agreement shall not contain provisions for any renewal term):
- 16.1.1 FRANCHISEE gives the COMPANY written notice of its election to renew not less than six (6) months nor more than nine (9) months prior to the expiration of the term of this Agreement and satisfies all other conditions set forth herein at the earlier of the times required or the date of expiration of this Agreement;
- 16.1.2 FRANCHISEE has secured the premises for the Retail Location by ownership or lease (satisfactory to the COMPANY) for the renewal term;
- 16.1.3 FRANCHISEE, and its partners, members and shareholders, each executes a general release in form and substance satisfactory to the COMPANY (limited to the extent required by applicable Franchise Law, if any), of any and all claims against the COMPANY, its affiliates, shareholders, directors, officers and employees;
- 16.1.4 FRANCHISEE, at the time of notice of election to renew and at the end of the term of this Agreement, is not in default of any of the terms, conditions, covenant or provision of this Agreement (and no event described in Section 14 exists), or any other agreement between FRANCHISEE and the COMPANY or any of its affiliates, and has substantially complied with the terms and conditions of all such agreements during the term of this Agreement;
- 16.1.5 All of FRANCHISEE's accrued monetary obligations to the COMPANY and its affiliates have been satisfied prior to renewal, and timely met throughout the term of this Agreement;
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, a franchisee has the option to renew their franchise agreement, provided the franchise isn't terminated. This renewal is enacted by executing Gold Star's then-current franchise agreement for an additional ten years, unless the cover page of the agreement specifies different terms, which would then take precedence. However, this is contingent on Gold Star still offering franchises for Restaurants using their Marks and System, and the new franchise agreement cannot include provisions for any renewal term.
To successfully renew, the franchisee must provide written notice to Gold Star of their intent to renew. This notice must be given no less than six months and no more than nine months before the current agreement expires. The franchisee must also secure the premises for the Retail Location, either through ownership or a lease that is satisfactory to Gold Star, for the renewal term. Furthermore, the franchisee, along with their partners, members, and shareholders, must execute a general release of claims against Gold Star and its affiliates, in a form and substance that is satisfactory to Gold Star. This release may be limited to the extent required by applicable Franchise Law.
At both the time of giving notice to renew and at the end of the current agreement's term, the franchisee must not be in default of any terms, conditions, covenants, or provisions of the agreement. This includes any other agreements between the franchisee and Gold Star or its affiliates. The franchisee must have also substantially complied with all terms and conditions of these agreements during the current term. If Gold Star accepts the renewal but the franchisee later defaults on any of these conditions, Gold Star has the right to rescind the renewal, provided they notify the franchisee according to any mandatory notice requirements imposed by governing Franchise Law. Failure to meet these conditions in a timely manner will be considered an election by the franchisee not to renew the agreement.
If the Franchise Laws of the state where the Gold Star store is located require Gold Star to give notice of expiration or a decision not to renew before the agreement's term expires, the agreement will remain effective until Gold Star provides such notice and the required time period has passed.