What must happen to the monies in the National Fund before Golden Corral can terminate it?
Golden_Corral Franchise · 2025 FDDAnswer from 2025 FDD Document
-
- Although Golden Corral intends the National Fund to be of perpetual duration, Golden Corral maintains the right to terminate the National Fund. The National Fund may not be terminated, however, until all monies in the National Fund have been expended for advertising and/or promotional purposes or returned to contributors on the basis of their respective contributions (Franchise Agreement, Section 11.2.7).
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 32–48)
What This Means (2025 FDD)
According to Golden Corral's 2025 Franchise Disclosure Document, Golden Corral maintains the right to terminate the National Fund, which is used for advertising and promotional activities. However, the National Fund cannot be terminated until all monies in the fund have been fully expended for advertising and/or promotional purposes. Alternatively, any remaining monies can be returned to the contributors, with the returns based on the proportion of their original contributions.
This condition ensures that franchisees' contributions to the National Fund are used as intended, either for advertising and promotion or returned to them, before Golden Corral can terminate the fund. This protects the financial interests of the franchisees who contribute to the fund, ensuring that the contributions are not used for other purposes if the fund is terminated.
As a prospective franchisee, it is important to understand how the National Fund operates, including the contributions required, how the funds are used, and the conditions under which the fund can be terminated. This information helps in assessing the value and potential benefits of the advertising and promotional activities supported by the fund.