What is the condition for Golden Corral to consider a relocation site for a franchise?
Golden_Corral Franchise · 2025 FDDAnswer from 2025 FDD Document
nchisee and approved by Franchisor, Franchisee shall execute a Site Selection Addendum (the "Site Selection Addendum") that will constitute an integral part of this Agreement and Franchisee shall thereafter obtain a location, subject to Franchisor's approval as provided in the Site Selection Addendum, which location shall constitute the Approved Location.
- 1.2.2 Franchisee shall not relocate the franchised business without the prior written approval of Franchisor. Franchisor will not consider for relocation any site which is not in the same market area as the original Restaurant's Approved Location. In the event that Franchisor in its sole discretion approves any such relocation, Franchisee shall execute (and/or upon Franchisor's request, shall cause all interested parties to execute), the standard form franchise agreement then being offered to new System franchisees and other ancillary agreements as Franchisor may require for the relocated franchised business and pay the then current initial franchise fee for such relocated restaurant, which agreements shall supersede this Agreement in all respects and the terms of which agreements may differ from the terms of this Agreement, including, without limitation, a higher percentage royalty rate and advertising contribution. Franchisee shall receive a pro rata credit for the unamortized amount of the initial franchise fee paid pursuant to this Agreement which will be cred
Source: Item 22 — CONTRACTS (FDD pages 84–85)
What This Means (2025 FDD)
According to Golden Corral's 2025 Franchise Disclosure Document, Golden Corral will only consider a relocation site if it is in the same market area as the original restaurant's approved location. If Golden Corral approves the relocation, the franchisee must execute the standard form franchise agreement then being offered to new system franchisees and other ancillary agreements and pay the then-current initial franchise fee for the relocated restaurant. These agreements will supersede the original agreement and may have different terms, including a higher royalty rate and advertising contribution.
However, the franchisee will receive a pro rata credit for the unamortized amount of the initial franchise fee paid under the original agreement, which will be credited toward the initial franchise fee for the relocated restaurant. For example, if the original initial franchise fee was $50,000 and the relocated restaurant opens ten years after the commencement of the original 15-year term, the franchisee will receive a pro rata credit.
This means that while Golden Corral allows for relocation under certain conditions, it comes with the requirement of signing a new franchise agreement that may include less favorable terms for the franchisee. The credit for the unamortized initial franchise fee helps to offset the cost of the new initial franchise fee, but franchisees should carefully consider the potential impact of higher royalty rates and advertising contributions on their profitability before deciding to relocate.