What expenses does the Real Estate Fee cover when opening a Goldfish Swim School franchise?
Goldfish_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
Should Franchisee fail to commence operations of the Approved Location for the Franchised Swim School within the Development Period, Franchisor has the right to terminate this Agreement. If this Agreement is terminated pursuant to this Section 5.7, Franchisor shall retain the entire Franchise Fee and Real Estate Fee paid by Franchisee. The Franchise Fee and Real Estate Fee retained shall be specifically understood and agreed by the parties to be in consideration of the services provided, time expended, work performed, and other efforts of Franchisor up to the date of Franchisee's failure to timely commence operations of the Franchised Swim School and shall not be construed as nor considered to be a penalty. Franchisor specifically reserves all rights and remedies available for Franchisee's breach of the Franchise Agreement.
Source: Item 23 — RECEIPTS (FDD pages 77–389)
What This Means (2025 FDD)
According to the 2025 Goldfish Swim School Franchise Disclosure Document, the Real Estate Fee covers the services, time, work, and effort that the franchisor puts in up to the point that the franchisee fails to open their franchised swim school on time. Specifically, if a franchisee fails to commence operations of the Approved Location for the Franchised Swim School within the Development Period, Goldfish Swim School has the right to terminate the Franchise Agreement. In this case, Goldfish Swim School will retain the entire Real Estate Fee paid by the franchisee.
This fee is not considered a penalty but rather compensation for the work the franchisor has already put into the project. This includes services provided, time expended, work performed, and other efforts made by Goldfish Swim School up to the date the franchisee fails to start operations on time.
For a prospective franchisee, this means that the Real Estate Fee is non-refundable under certain conditions, particularly if the franchisee fails to meet the timeline for opening the swim school. It is essential to understand the Development Period and ensure that all necessary steps are taken to begin operations within the stipulated timeframe to avoid losing this fee. The franchisor retains all rights and remedies available for the franchisee's breach of the Franchise Agreement.