In Michigan, is Goldfish Swim School permitted to transfer its contractual obligations to a franchisee without providing the required contractual services?
Goldfish_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
FOR THE STATE OF MICHIGAN
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- THE STATE OF MICHIGAN PROHIBITS CERTAIN UNFAIR PROVISIONS THAT ARE SOMETIMES IN FRANCHISE DOCUMENTS. IF ANY OF THE FOLLOWING PROVISIONS ARE IN THESE FRANCHISE DOCUMENTS, THE PROVISIONS ARE VOID AND CANNOT BE ENFORCED AGAINST YOU.
- A prohibition of your right to join an association of Franchisees.
- A requirement that you assent to a release, assignment, novation, waiver or estoppel that deprives you of rights and protections provided in this act. This shall not preclude you, after entering into a Franchise Agreement, from settling any and all claims.
- A provision that permits us to terminate a franchise prior to the expiration of this term except for good cause. Good cause shall include your failure to comply with any lawful provision of the Franchise Agreement and to cure the failure after being given written notice of the failure and a reasonable opportunity, which in no event need be more than 30 days, to cure the failure.
- A provision that permits us to refuse to renew a franchise without fairly compensating you by repurchase or other means for the fair market value at the time of expiration of your inventory, supplies, equipment, fixtures and furnishings. Personalized materials that have no value to us and inventory, supplies, equipment, fixtures and furnishings not reasonably required in the conduct of the Franchised Swim School are not subject to compensation. This subsection applies only if: (a) the term of the franchise is less than 5 years, and (b) you are prohibited by the franchise agreement or other agreement from continuing to conduct substantially the same business under another trademark, service mark, trade name, logotype, advertising or other commercial symbol in the same area subsequent to the expiration of the franchise or you do not receive at least 6 months advance notice of our intent not to renew the franchise.
- A provision that permits us to refuse to renew a franchise on terms generally available to other Franchisees of the same class or type under similar circumstances. This section does not require a renewal provision.
Source: Item 22 — CONTRACTS (FDD pages 76–77)
What This Means (2025 FDD)
According to the 2025 Goldfish Swim School Franchise Disclosure Document, Michigan law includes specific protections for franchisees. If any of the listed provisions are present in the franchise documents, they are considered void and unenforceable against the franchisee.
Specifically, Michigan prohibits requiring a franchisee to agree to a release, assignment, novation, waiver, or estoppel that would deprive them of rights and protections under the state's franchise laws. This means Goldfish Swim School cannot enforce a clause that forces a franchisee to surrender their legal rights or accept a transfer of obligations that leaves them without the services they are contractually entitled to. However, the FDD clarifies that franchisees can settle claims after entering into a Franchise Agreement.
This protection ensures that Goldfish Swim School franchisees in Michigan retain their rights and recourse under the law, preventing the franchisor from using contractual terms to circumvent those protections. Prospective franchisees should carefully review the Franchise Agreement and related documents to ensure compliance with Michigan law.