In Michigan, does Goldfish Swim School have the right of first refusal to purchase the assets of a Goldfish Swim School franchise?
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)
The 2025 Goldfish Swim School Franchise Disclosure Document includes specific stipulations for franchisees operating in Michigan. According to the FDD, Michigan law prohibits certain unfair provisions that are sometimes included in franchise documents. If any of these prohibited provisions are present in the Goldfish Swim School franchise documents, they are considered void and unenforceable against the franchisee.
Among the provisions that Michigan law prohibits are those that would restrict a franchisee's right to join a franchisee association, require a franchisee to waive rights or protections under the law, allow Goldfish Swim School to terminate a franchise without good cause (including failure to comply with the agreement and a reasonable opportunity to cure), or permit Goldfish Swim School to refuse renewal without fair compensation for the franchisee's assets. The compensation applies to inventory, supplies, equipment, fixtures, and furnishings if the franchise term is less than 5 years and the franchisee is restricted from operating a similar business in the same area after the franchise expires. Also, Goldfish Swim School cannot refuse to renew a franchise on terms not generally available to other franchisees in similar circumstances.
However, the FDD excerpt does not explicitly state whether Goldfish Swim School has a right of first refusal to purchase the assets of a Goldfish Swim School franchise in Michigan. A prospective franchisee should review the Franchise Agreement and related documents carefully and seek legal counsel to fully understand their rights and obligations under Michigan law.