Does being in default of any agreement with Goldfish Swim School prevent franchise renewal?
Goldfish_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise or Other Agreement | Summary |
|---|---|---|
| h. "Cause" defined non-curable defaults | Section 16.2 | We have the right to terminate the Franchise Agreement without giving you an opportunity to cure if you: fail to timely select an approved site for or establish, equip and begin operations of the franchised swim school; fail to have your Designated Manager or on-site general manager satisfactorily complete training; made a material misrepresentation or omission in the application for the franchise; are convicted of or plead no contest to a felony or other crime or offense likely to affect the reputation of either party or the franchised swim school; after notice to cure, fail to refrain from activities, behavior or conduct likely to adversely affect the reputation of either party or the franchised swim school; use the Confidential Brand Standards Manual, trade secrets or other confidential information in an unauthorized manner; if required, fail to have your owners (and members of their immediate families and households), officers, directors, managers, executives, employees and professional staff, and other individuals having access to trade secrets or other confidential information sign nondisclosure and non competition agreements or, if requested, fail to provide us with copies of all signed nondisclosure and non competition agreements; abandon the franchised swim school for 5 or more consecutive days; surrender or transfer control of the franchised swim school in an unauthorized manner; fail to maintain the franchised swim school under the supervision of an approved Designated Manager or on-site general manager following your death or disability; submit reports on 3 or more separate occasions understating any amounts due by more than 3%; are adjudicated bankrupt, insolvent or make a general assignment for the benefit of creditors; misuse or make unauthorized use of the Marks; fail on 3 or more occasions within any 12 months to submit reports or records or to pay any fees due us or any affiliate; continue to violate any health, safety or other laws or operate the franchised swim school in a manner creating a health or safety hazard to customers, employees or the public; take any action reserved to us; fail to comply with applicable law after notice; repeatedly breach the franchise agreement or comply with specifications; or default under any other agreement with us (or an affiliate) so that we (or the affiliate) have the right to terminate the agreement. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 54–64)
What This Means (2025 FDD)
According to Goldfish Swim School's 2025 Franchise Disclosure Document, defaulting on any agreement with Goldfish Swim School or its affiliates can lead to termination of the franchise agreement, which would prevent renewal. Specifically, if a franchisee defaults under any agreement with Goldfish Swim School (or an affiliate) to the extent that Goldfish Swim School (or the affiliate) has the right to terminate the agreement, Goldfish Swim School has the right to terminate the Franchise Agreement without allowing an opportunity to cure the default.
This provision means that franchisees must remain in good standing with all agreements, not just the franchise agreement itself. This could include loan agreements, supply agreements, or any other contracts with Goldfish Swim School or related entities. Failure to meet the obligations of these agreements could be grounds for termination, regardless of the franchisee's compliance with the core franchise agreement terms.
For a prospective Goldfish Swim School franchisee, this highlights the importance of carefully reviewing all agreements associated with the franchise, not just the primary franchise agreement. Understanding the terms and conditions of each agreement and ensuring compliance is crucial to avoid potential default and subsequent termination, which would prevent renewal of the franchise. Franchisees should seek legal counsel to fully understand their obligations under all agreements.