Can a Goldfish Swim School Developer's employees be considered employees of the Franchisor?
Goldfish_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
None of Developer's employees will be considered Franchisor's employees.
Neither Developer nor any of its employees whose compensation Developer pays may in any way, directly or indirectly, expressly or by implication, be construed to be Franchisor's employee for any purpose, most particularly with respect to any mandated or other insurance coverage, tax or contributions, or requirements pertaining to withholdings, levied or fixed by any local, state, or federal government agency.
Franchisor shall not have the power to hire or fire Developer's employees.
Developer expressly agrees, and will never contend otherwise, that Franchisor's authority under this Agreement to certify certain of Developer's employees for qualification to perform certain functions for Developer does not directly or indirectly vest in Franchisor the power to hire, fire, or control such employee.
Developer acknowledges and agrees, and will never contend otherwise, that Developer alone will exercise day-to-day control over all operations, activities and elements of the development and operation of the Franchised Swim Schools developed hereunder and that under no circumstance shall Franchisor do so or be deemed to do so.
Source: Item 22 — CONTRACTS (FDD pages 76–77)
What This Means (2025 FDD)
According to the 2025 Goldfish Swim School Franchise Disclosure Document, employees of the Developer are not considered employees of the Franchisor. The agreement specifies that neither the Developer nor its employees can be construed as Goldfish Swim School's employees for any purpose, especially concerning insurance, taxes, contributions, or withholdings mandated by government agencies. Goldfish Swim School lacks the authority to hire or fire the Developer's employees.
This distinction is further reinforced by stating that the Developer has control over the daily operations of the Franchised Swim Schools. The Franchisor's authority to certify certain employees of the Developer does not give Goldfish Swim School the power to hire, fire, or control those employees. The Developer is solely responsible for exercising control over all aspects of the swim school's development and operation.
This separation is a standard practice in franchising, where franchisees operate as independent business owners. It clarifies that the Developer is responsible for all employment-related obligations, including wages, benefits, and compliance with labor laws. This arrangement protects Goldfish Swim School from potential liabilities associated with the Developer's employees and ensures that the Developer maintains autonomy in managing its workforce.