Is the Goldfish Swim School franchise agreement considered personal to the franchisee?
Goldfish_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee acknowledges that Franchisor would be unable to protect the Trade Secrets and other Confidential Information against unauthorized use or disclosure and would be unable to encourage a free exchange of ideas and information among Goldfish Swim School franchisees if owners of Goldfish Swim Schools and members of their immediate families or households were permitted to hold an interest in or perform services for any Competitive Business. Therefore, during the term of this Agreement, neither Franchisee nor any holder of a legal or beneficial interest in Franchisee (or any member of their immediate families or households), nor any officer, director, executive, manager or member of the professional staff of Franchisee, either directly or indirectly, for themselves, or through, on behalf of or in conjunction with any person, partnership, corporation, limited liability company or other business entity, shall:
- 7.3.1 Divert or attempt to divert any business or customer of the Franchised Swim School to any Competitive Business, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks or the System; or
- 7.3.2 Own an interest in, manage, operate, or perform services for any Competitive Business wherever located.
7.4 Nondisclosure and Non-Competition Agreements with Certain Individuals
Franchisor has the right to require any holder of a legal or beneficial interest in Franchisee (and any member of their immediate families or households), and any officer, director, executive, manager or member of the professional staff of Franchisee to execute a nondisclosure and non-competition agreement, in a form the same as or similar to the
Source: Item 23 — RECEIPTS (FDD pages 77–389)
What This Means (2025 FDD)
According to the 2025 Goldfish Swim School FDD, the franchise agreement includes non-compete clauses that apply to the franchisee and related individuals, suggesting the agreement is personal in nature. During the term of the Franchise Agreement and for two years after termination, the franchisee is restricted from engaging in any Competitive Business within a specified radius of their Goldfish Swim School or any other Goldfish Swim School. This restriction applies regardless of the cause of termination.
These non-compete obligations extend not only to the franchisee but also to individuals associated with the franchisee, such as owners, family members, officers, directors, executives, managers, and professional staff. Goldfish Swim School can require these individuals to sign non-disclosure and non-competition agreements. These measures aim to protect Goldfish Swim School's trade secrets, confidential information, and goodwill by preventing those closely associated with the franchise from using their knowledge and relationships to benefit a competing business.
Furthermore, franchisees must acknowledge that they alone control the day-to-day operations of their Goldfish Swim School. They must also adhere to the standards set forth in the Confidential Brand Standards Manual. This reinforces the personal responsibility and involvement expected of each franchisee in maintaining the brand's standards and operational integrity. The agreement also specifies that the franchisee is an independent contractor solely responsible for all aspects of the development and operation of the franchised swim school, subject to the conditions and covenants established by the agreement.
These provisions collectively indicate that the Goldfish Swim School franchise agreement is deeply personal, requiring the franchisee's direct involvement and imposing restrictions on their activities and those of related parties to safeguard the franchisor's interests and maintain the integrity of the Goldfish Swim School system.