What fees are associated with relocating a Golden Corral 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 credited toward the initial franchise fee payable under any such relocated restaurant's franchise agreement. For example, if the term of this Agreement is fifteen (15) years, the original initial franchise fee was $50,000 and the relocated restaurant opens ten (10) years after the commencement of the term of th
Source: Item 22 — CONTRACTS (FDD pages 84–85)
What This Means (2025 FDD)
According to the 2025 Golden Corral FDD, a franchisee cannot relocate their franchised business without prior written approval from Golden Corral. Golden Corral will not consider relocation to a site outside the original restaurant's market area. If Golden Corral approves a relocation, the franchisee must execute the standard franchise agreement then offered to new franchisees, along with any other required ancillary agreements. They must also pay the then-current initial franchise fee for the relocated restaurant. These new agreements will supersede the original agreement and may have different terms, including potentially higher royalty rates and advertising contributions.
However, the franchisee will receive a pro rata credit for the unamortized amount of the initial franchise fee paid under the original agreement. This credit will be applied toward the initial franchise fee for the relocated restaurant. For instance, if the original agreement had a 15-year term and the initial franchise fee was $50,000, and the relocation occurs ten years into the term, the franchisee would receive a credit of $16,667 toward the new restaurant's initial franchise fee.
It's important to note that any approvals for relocation are at Golden Corral's sole discretion and do not guarantee the profitability or success of the relocated restaurant. This means that even with approval and the associated costs, the franchisee bears the risk of the new location's performance. This policy is fairly standard in the franchise industry, as franchisors typically want to maintain control over brand consistency and market strategy, while franchisees bear the financial risks of their individual locations.