Can I divert customers from my Goldfish Swim School franchise to a competing business?
Goldfish_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
s or obtain injunctive or other equitable relief in connection with the violation or anticipated violation of such obligations, covenants and agreements.
11. RIGHTS AND DUTIES OF PARTIES UPON TERMINATION OR EXPIRATION
Upon termination or expiration of this Agreement, all rights granted to you will automatically terminate, and:
- A. All remaining rights granted to you to develop Swim schools under this Agreement will automatically be revoked and will be null and void. You will not be entitled to any refund of any fees. You will have no right to develop or operate any business for which a Franchise Agreement has not been executed by us. We will be entitled to develop and operate, or to franchise others to develop and operate, Swim schools in the Territory, except as may be otherwise provided under any Franchise Agreement that has been executed between us and you and that has not been terminated.
- B. You must immediately cease to operate your business under this Agreement and must not thereafter, directly or indirectly, represent to the public or hold yourself out as a present or former developer of ours.
- C. You must take such action as may be necessary to cancel or assign to us or our designee, at our option, any assumed name or equivalent registration that contains our name or any of the words Goldfish™ or Goldfish Swim School® or any other Trademark of ours, and you must furnish us with evidence satisfactory to us of compliance with this obligation within thirty (30) days after termination or expiration of this Agreement.
- D.
Source: Item 22 — CONTRACTS (FDD pages 76–77)
What This Means (2025 FDD)
The 2025 Goldfish Swim School Franchise Disclosure Document does not explicitly state whether a franchisee can divert customers to a competing business during the term of the agreement. However, the document does state the obligations of the franchisee upon termination or expiration of the franchise agreement. Specifically, upon termination or expiration, the franchisee must cease operating the business under the Goldfish Swim School name and must not represent themselves as a present or former developer of Goldfish Swim School. They must also cancel or assign to Goldfish Swim School any assumed name or registration that contains the Goldfish Swim School name or trademarks. Additionally, the franchisee must assign their telephone numbers to Goldfish Swim School. These stipulations suggest that while operating a Goldfish Swim School franchise, a franchisee is expected to fully commit to the brand and its standards.
While the FDD outlines post-termination obligations, it does not directly address the scenario of actively diverting customers to a competing business while the franchise agreement is still in effect. Such actions could potentially be interpreted as a breach of contract, a violation of good faith, or a conflict of interest, as the franchisee is expected to promote and operate the Goldfish Swim School business to the best of their ability during the agreement term.
Therefore, a prospective franchisee should seek clarification from Goldfish Swim School regarding their policies on franchisee involvement with competing businesses during the franchise agreement. Understanding these policies is crucial to avoid potential legal or contractual issues and to ensure a clear understanding of the franchisee's obligations and limitations.