What must Golden Corral do with the monies in the National Fund if it is terminated?
Golden_Corral Franchise · 2025 FDDAnswer from 2025 FDD Document
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- 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, but only after 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 distribution based on their respective contributions.
This stipulation protects franchisees by ensuring that advertising funds are used appropriately, even if the National Fund is discontinued. Franchisees contributing to the National Fund can be assured that their contributions will either be used for the intended advertising and promotional activities or returned to them proportionally.
This condition is important for prospective franchisees to consider, as it provides a safeguard regarding the use of advertising funds. It is fairly common for franchise systems to have stipulations around advertising fund usage, particularly in the event of termination, to ensure transparency and proper allocation of resources.