In the Goldfish Swim School Franchise Agreement, what are the permissible legal structures for the franchisee?
Goldfish_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
n, Franchisee shall not, directly or indirectly, for itself or through, on behalf of or in conjunction with, any person, persons, partnership, corporation, limited liability company or other business entity, divert or attempt to divert any business or customer of Franchisee 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 Company's service mark "Goldfish Swim School®" and such other trade names, trademarks, service marks, trade dress, designs, graphics, logos, emblems, insignia, fascia, slogans, drawings and other commercial symbols as Company designates to be used in connection with Goldfish Swim Schools or Company's uniform standards, methods, procedures and specifications for the establishment and operation of Goldfish Swim Schools.
- b) During the term of the Franchise Agreement, Franchisee shall not, directly or indirectly, for itself or through, on behalf of or in conjunction with, any person, persons, partnership, corporation, limited liability company or other business entity, carry on, be engaged in or take part in, render services to, operate, or own or share in the earnings of any Competitive Business anywhere within the United States without the express written consent of Company, and for a period of two (2) years thereafter, regardless of the cause of termination, Franchisee shall not, directly or indirectly, for itself or through, on behalf of or in conjunction with, any person, persons, partnership, corporation, limited liability company or other business entity, carry on, be engaged in or take part in, render services to, operate, or own or share in the earnings of any Competitive Business (a) within a twenty-five (25) mile radius of the location of Franchisee's Franchised Swim School or within Franchisee's territory as provided in the Franchise Agreement (whichever is greater), or (b) within a twenty-five (25) mile radius of the location of any other Goldfish Swim School in existence at the time of termination or expiration, without the express written consent of Company.
Source: Item 23 — RECEIPTS (FDD pages 77–389)
What This Means (2025 FDD)
According to the 2025 Goldfish Swim School Franchise Disclosure Document, the franchise agreement specifies several permissible legal structures for franchisees. Specifically, franchisees can operate as individuals, partnerships, corporations, limited liability companies, or other business entities. This flexibility allows prospective franchisees to choose a legal structure that best suits their business needs and financial situation.
This provision is fairly standard in franchising, as franchisors typically want to accommodate a range of franchisee circumstances. The agreement also stipulates that the franchisee cannot engage in competitive business activities during the term of the agreement, or for two years after, either directly or indirectly through any of these business entities, without written consent from Goldfish Swim School. This restriction applies within a 25-mile radius of the franchisee's swim school or any other Goldfish Swim School location.
Furthermore, the franchise agreement states that certain individuals associated with the franchisee, such as those holding a legal or beneficial interest, or officers and managers, are also subject to these restrictions. This ensures that the non-compete obligations are comprehensive and protect Goldfish Swim School's interests by preventing unauthorized use or disclosure of trade secrets and confidential information.