When franchising a Goldfish Swim School, what offenses disqualify a franchisee or owner of 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, several actions can disqualify a franchisee or those holding an interest in the franchise. During the franchise agreement, franchisees, those holding legal or beneficial interest in the franchisee, their immediate family or household members, or any officer, director, executive, manager, or member of the professional staff cannot divert business or customers to a competitive business, nor can they own an interest in, manage, operate, or perform services for a competitive business. These restrictions aim to protect Goldfish Swim School's trade secrets, confidential information, and the free exchange of ideas among franchisees.
Specifically, these individuals are prohibited from diverting business away from the Goldfish Swim School to any competitive business or performing any action that could harm the goodwill associated with the Goldfish Swim School brand. They are also barred from owning an interest in, managing, operating, or providing services to any competitive business, regardless of its location.
Goldfish Swim School also has the right to require anyone holding legal or beneficial interest in the franchisee, their immediate family members, household members, or any officer, director, executive, manager, or member of the professional staff to sign a non-disclosure and non-competition agreement. These measures ensure that all parties associated with the franchise are committed to maintaining the integrity and competitiveness of the Goldfish Swim School system.