What was the consolidated net income for Goldfish Swim School in 2021?
Goldfish_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
During the year ended December 31, 2021, Goldfish Swim School Franchising, LLC received a Paycheck Protection Program loan in the amount of $693,815. The PPP was created under the Coronavirus Aid, Relief, and Economic Security (CARES) Act and is administered by the Small Business Administration (SBA). Under the terms of this program, the loan may be fully or partially forgiven if the loan proceeds are spent on qualifying expenses and if staffing level and salary maintenance requirements are met. The Company may use the funds on qualifying expenses over a covered period up to 24 weeks.
The PPP loan was completely forgiven as of December 31, 2021. Accordingly, for the year ended December 31, 2021, the Company has recognized $693,815 received under the PPP loan program as other income on the consolidated statement of operations.
Management has determined it is probable the Company met the eligibility conditions for the ERC, including having operations suspended to comply with a government order related to COVID-19 and incurring eligible payroll expenses. For the years ended December 31, 2022 and 2021, the Company recognized approximately $115,000 and $92,000, respectively, under the ERC as a reduction of expenses. The ERC did not have any impact on the consolidated statement of operations for the year ended December 31, 2023.
In accordance with the franchise agreement, franchisees pay a percentage of monthly sales to a brand fund to be used for advertising, marketing, and other promotional purposes. The contribution received from franchisees for the brand fund is segregated into a separate bank account maintained by Goldfish Swim School Franchise Marketing, LLC. Any excess amounts remaining in the brand fund at the end of the year are used for marketing and promotion in the following year. Effective January 1, 2021, the Company elected to accrue all brand fund fees collected in excess of advertising expended, resulting in a liability equal to $1,102,785 as of December 31, 2021 on the accompanying consolidated balance sheet. As of December 31, 2022, cumulative advertising expended exceeded brand fund fees collected, and no liability was recognized. Prior to the election, brand fund fees and expenses were recorded at their gross amounts on the consolidated statement of operations. Unspent brand fund fees were not significant as of December 31, 2020.
Source: Item 22 — CONTRACTS (FDD pages 76–77)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Goldfish Swim School's consolidated net income is not explicitly stated. However, the document does provide some information regarding revenue and expenses that can be used to infer information about net income.
Specifically, the document mentions that Goldfish Swim School Franchising, LLC received Paycheck Protection Program (PPP) loans. In 2021, the company recognized $693,815 received under the PPP loan program as other income on the consolidated statement of operations. Additionally, the company recognized approximately $92,000 under the Employee Retention Credit (ERC) as a reduction of expenses for the year ended December 31, 2021.
Furthermore, the document indicates that effective January 1, 2021, the company elected to accrue all brand fund fees collected in excess of advertising expended, resulting in a liability equal to $1,102,785 as of December 31, 2021. To gain a comprehensive understanding of Goldfish Swim School's financial performance, a prospective franchisee should request the complete audited financial statements, which would include the consolidated statement of operations and detail the company's revenues, expenses, and net income for the specified period.