What is the exception to the restrictions on owning an interest in a Competing Business for Goldfish Swim School?
Goldfish_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
Competing Business - means any business that offers (or grants franchises or licenses to others to operate a business that offers) swim instruction to children the same as or similar to those provided by Goldfish Swim Schools or in which Trade Secrets or other Confidential Information could be used to the disadvantage of Franchisor, any Affiliate or its other franchisees; provided, however, that the term "Competitive Business" shall not apply to (a) any business operated by Developer under a Franchise Agreement with Franchisor, or (b) any business operated by a publicly-held entity in which Developer owns less than a five percent (5%) legal or beneficial interest.
Source: Item 22 — CONTRACTS (FDD pages 76–77)
What This Means (2025 FDD)
According to the 2025 Goldfish Swim School Franchise Disclosure Document, a "Competing Business" is defined as any business that offers swim instruction to children similar to Goldfish Swim Schools, or any business where Trade Secrets or Confidential Information could be used to the disadvantage of the franchisor, its affiliates, or other franchisees. However, there are exceptions to this restriction.
The term "Competitive Business" does not apply to (a) any business operated by the Developer (franchisee) under a Franchise Agreement with Goldfish Swim School, or (b) any business operated by a publicly-held entity in which the Developer owns less than a five percent (5%) legal or beneficial interest.
In practical terms, this means a Goldfish Swim School franchisee can operate another Goldfish Swim School franchise without violating the competitive business restrictions. Additionally, a franchisee can own a small stake (less than 5%) in a publicly traded company that might be considered a competing business without violating the agreement. This allows franchisees some flexibility in their investment and business activities outside of their Goldfish Swim School franchise.