Who must Golden Corral agreements identify as a third-party beneficiary?
Golden_Corral Franchise · 2025 FDDAnswer from 2025 FDD Document
If the franchisee or developer is a business entity, at our request, any holder of an interest in the franchisee or developer must sign a guarantee of the franchisee's or developer's obligations to us under the Franchise Agreement or Development Agreement. In addition, at our request, you must provide us with executed agreements required by the Franchise Agreement or Development Agreement (including agreements applicable upon the termination of the person's relationship with you) from your managers, officers, directors, and owners. Your managers must sign confidentiality and in-term and post-term non-compete agreements. You may not permit an individual to have access to any confidential aspect of the System or any Restaurant before signing a confidentiality and noncompete agreement. All such agreements must be in forms satisfactory to us, including specific identification of Golden Corral as a third-party beneficiary with the independent right to enforce the agreement.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 56–58)
What This Means (2025 FDD)
According to Golden Corral's 2025 Franchise Disclosure Document, if a franchisee or developer is a business entity, Golden Corral may request that any holder of interest in the franchisee or developer sign a guarantee of the franchisee's or developer's obligations to Golden Corral under the Franchise Agreement or Development Agreement. Additionally, Golden Corral may request executed agreements from the franchisee's managers, officers, directors, and owners, including agreements applicable upon the termination of the person's relationship with the franchisee.
Specifically, the franchisee's managers must sign confidentiality and in-term and post-term non-compete agreements. The franchisee cannot allow an individual to access any confidential aspect of the Golden Corral system or any restaurant before signing a confidentiality and non-compete agreement.
All such agreements must be in forms satisfactory to Golden Corral, including specific identification of Golden Corral as a third-party beneficiary with the independent right to enforce the agreement. This means that Golden Corral has the right to directly enforce the terms of these agreements, even though they are signed between the franchisee and their personnel. This is a common practice in franchising to protect the franchisor's interests and confidential information.