What is the geographic limit of the rights granted under the Goldfish Swim School development agreement?
Goldfish_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
The rights granted under this Agreement are limited to the right to develop and operate Swim schools located in the Territory, and do not include (i) any right to sell products or services identified by the Trademarks at any Location or through any other channel or method of distribution, including without limitation, the internet, world wide web or other existing or future form of electronic commerce, other than at Swim schools within the Territory; (ii) any right to sell products and services identified by the Trademarks to any person or entity for resale or further distribution; or (iii) any right to exclude, control or impose conditions on our development or operation of franchised, company or affiliate-owned Swim schools at any time or at any Location outside the Territory.
Source: Item 22 — CONTRACTS (FDD pages 76–77)
What This Means (2025 FDD)
According to the 2025 Goldfish Swim School FDD, the rights granted to the developer are specifically limited to the territory outlined in the development agreement. The developer has the right to develop and operate Goldfish Swim School locations within this defined territory. Goldfish Swim School will not develop or authorize others to develop swim schools in the territory as long as the developer is not in default. However, this right is not indefinite, as Goldfish Swim School retains the right to operate and franchise others outside the designated territory.
This territorial exclusivity applies only to the development and operation of Goldfish Swim School locations. The developer's rights do not extend to selling products or services identified by the Goldfish Swim School trademarks outside of these physical locations. This restriction includes sales through any other channel or method of distribution, explicitly mentioning the internet and other forms of electronic commerce. The developer also cannot sell products and services identified by the trademarks to any person or entity for resale or further distribution.
Goldfish Swim School maintains the right to develop or operate franchised, company-owned, or affiliate-owned swim schools at any location outside the developer's territory at any time. This means a developer's rights are strictly confined to their assigned area, and they cannot influence or control Goldfish Swim School's expansion efforts elsewhere. Furthermore, Goldfish Swim School reserves the right to use components of its system in connection with other concepts and engage in other concepts, even within the developer's territory, which may compete directly or indirectly with the developer's Goldfish Swim School.
For a prospective franchisee, this means understanding the specific boundaries of the territory granted in the development agreement is crucial. The franchisee should also be aware that Goldfish Swim School can pursue other business ventures, potentially competitive, even within the franchisee's territory. The franchisee's focus must remain on maximizing the potential within their defined territory while acknowledging the limitations on expanding beyond it or controlling Goldfish Swim School's broader business activities.