How does Goldfish Swim School exercise its option to accept assignment of the Real Estate Lease?
Goldfish_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
HISE AGREEMENT**
CONDITIONAL ASSIGNMENT OF LEASE AND LEASE RIDER
THIS AGREEMENT ("Agreement") is made and entered into between Goldfish Swim
| Accrued and other current liabilities: | | | | | |---|---|---|---|---| | Taxes payable | | | | 12,100 | | Accrued compensation | 53,312 | 69,561 | 108,025 | | | Other accrued liabilities | 53,143 | 12,091 | 10,660 | | | Total current liabilities | 1,242,569 | 1,705,584 | 2,737,954 | | | Long-term Debt - Net of current portion (Note 7) | | | | 146,371 | | Lease Liability - Operating - Net of current portion (Note 5) | 1,580,792 | 1,678,796 | | | | Other Long-term Liabilities - Deferred revenue - Net of | | | | | | current portion | | | | | | | 4,107,028 | 3,338,139 | 3,090,167 | | | Total liabilities | 6,930,389 | 6,722,519 | 5,974,492 | | | Members' Equity | 2,467,754 | 1,434,430 | 3,523,373 | | | Total liabilities and members' equity | $9,398,143 | $8,156,949 | $ | | A. Termination of Franchise Agreement. Upon termination or expiration without renewal of the Franchise Agreement, GOLDFISH shall have the option to accept the assignment of the Real Estate Lease pursuant to this Agreement by giving the notice prescribed
first refusal or otherwise, such assignment to become effective upon the occurrence of either of
the following:
by this Conditional Assignment of Lease, in which case it is agreed the Real Estate Lease shall remain in effect as to GOLDFISH.
- B. Termination of Real Estate Lease. Upon termination of the Real Estate Lease as to Franchisee or termination of Franchisee's possession rights under the Real Estate Lease, whether by Franchisee's default under the Real Estate Lease or otherwise, GOLDFISH shall have the option to accept the assignment of the Real Estate Lease pursuant to this Agreement by giving the notice prescribed by this Conditional Assignment of Lease, in which case it is agreed the Real Estate Lease shall remain in effect as to GOLDFISH.
- C. Franchisee Right to Assign. At Franchisee's discretion, Franchisee may assign the Real Estate Lease to GOLDFISH, and GOLDFISH may accept such assignment, at any time.
GOLDFISH has no liability whatsoever with respect to the Lease unless and until GOLDFISH exercises its option to take assignment of the Lease as described in this Agreement.
GOLDFISH may assign its rights hereunder to an affiliate of GOLDFISH, who may take assignment of such rights prior to any GOLDFISH's acceptance of assignment of the Real Estate Lease.
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- Effect of Assignment. Upon GOLDFISH's exercise of its option to take the above-described assignment:
- A. Franchisee shall be relieved from any further liability under the provisions of the Real Estate Lease and the Real Estate Lease shall be terminated as to Franchisee; provided; however, that Franchisee shall remain liable for any amounts owing, or any other default occurring, prior to the effective date of assignment.
- B. GOLDFISH shall succeed to all of Franchisee's rights, options, and obligations under the Real Estate Lease commencing with the effective date of the assignment and shall have the right to transfer or assign the Real Estate Lease to another GOLDFISH® Franchisee without the need to seek consent from the Landlord. GOLDFISH's transfer to another GOLDFISH® Franchisee relieves GOLDFISH from any further liability under the Real Estate Lease.
3.
Source: Item 23 — RECEIPTS (FDD pages 77–389)
What This Means (2025 FDD)
According to the 2025 Goldfish Swim School FDD, Goldfish Swim School has the option to accept assignment of the Real Estate Lease under certain conditions. These conditions include the termination or expiration without renewal of the Franchise Agreement, or the termination of the Real Estate Lease as to the franchisee. To exercise this option, Goldfish Swim School must provide the notice prescribed by the Conditional Assignment of Lease, which ensures the Real Estate Lease remains in effect for Goldfish Swim School.
Specifically, if the landlord provides Goldfish Swim School notice of any default under the Real Estate Lease, Goldfish Swim School has the option to cure the default if the franchisee fails to do so within the allotted time. After the franchisee's cure period expires, Goldfish Swim School has fifteen (15) days to decide whether to cure the default. The landlord must provide Goldfish Swim School with written notice at least thirty (30) days before the termination of the Real Estate Lease, its expiration without renewal, or the date of reentry or repossession. Goldfish Swim School then has thirty (30) days after receiving this notice to exercise its option to accept assignment of the Real Estate Lease by providing written notice to the landlord, with the assignment becoming effective upon the termination of the Real Estate Lease as to the franchisee.
Furthermore, Goldfish Swim School will provide the landlord copies of any termination notices given to the franchisee regarding the Franchise Agreement. If Goldfish Swim School wishes to exercise its option to accept the lease assignment due to the franchisee's failure to cure a default of the Franchise Agreement, it must provide the landlord with written notice on or before the termination date of the Franchise Agreement. The landlord can rely solely on the written notice from Goldfish Swim School regarding the termination or expiration of the Franchise Agreement, and the franchisee releases the landlord from any liability for actions taken in reliance on such notice.
This arrangement protects Goldfish Swim School by allowing it to maintain control over the location of a franchise even if the franchisee defaults or the franchise agreement is terminated. For a prospective franchisee, this means that Goldfish Swim School has significant control over the leased premises and can step in to take over the lease if necessary, potentially impacting the franchisee's business operations and investment.