For Goldfish Swim School, on which pages of the FDD can I find the Notes to Consolidated Financial Statements?
Goldfish_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 22: CONTRACTS]
Notes to Consolidated Financial Statements
December 31, 2024, 2023, and 2022
Note 1 - Nature of Business
Goldfish Swim School Franchising, LLC and Subsidiary (the "Company") is engaged in franchising and support of franchisees in the establishment and operations of Goldfish Swim Schools. Franchise schools are located throughout the United States.
The Company executes franchise agreements that establish the terms of its arrangement with franchisees. The franchise agreements require the franchisee to pay an initial fee of $50,000, with a reduction in the franchise fee for opening additional franchises. In addition to the initial investment fee, the franchisee pays the Company a monthly royalty fee of 6 percent of gross sales and a brand fund contribution of up to 2 percent of gross sales.
At December 31, 2024, there were 215 signed franchise agreements and 56 signed area development agreements, with 177 swim schools open and operating. At December 31, 2023, there were 197 signed franchise agreements and 52 signed area development agreements, with 159 swim schools open and operating. At December 31, 2022, there were 175 signed franchise agreements and 50 signed area development agreements, with 137 swim schools open and operating.
Note 2 - Significant Accounting Policies
Basis of Accounting
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The Company elected to adopt certain accounting alternatives for private companies developed by the Private Company Council, including the accounting alternative for variable interest entities. Under this accounting alternative, the Company is not required to apply the variable interest entity guidance when determining whether it is required to consolidate legal entities that are under common control that meet certain criteria. Instead, the determination of whether these legal entities under common control are consolidated is based on whether the Company controls the legal entities based on its direct voting rights in those entities.
Principles of Consolidation
The consolidated financial statements include the accounts of Goldfish Swim School Franchising, LLC and its wholly owned subsidiary, Goldfish Swim School Franchise Marketing, LLC. All significant intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
Source: Item 22 — CONTRACTS (FDD pages 76–77)
What This Means (2025 FDD)
According to the 2025 Goldfish Swim School FDD, the Notes to Consolidated Financial Statements can be found within Item 22, Contracts. These notes provide additional context and details regarding the financial statements of Goldfish Swim School Franchising, LLC and its subsidiary.
The notes cover various aspects of the company's accounting practices, including the nature of the business, significant accounting policies, and details regarding revenue recognition. For example, the notes explain that Goldfish Swim School Franchising, LLC earns revenue from royalties, franchise fees, brand fund fees, and technology fees from its franchised schools. The initial term of the franchise agreements is typically 15 years.
Specifically, the Notes to Consolidated Financial Statements include information such as the basis of accounting, principles of consolidation, use of estimates, cash equivalents, and restricted cash. For instance, the FDD notes that the company considers investments with an original maturity of three months or less to be cash equivalents. The notes also detail the amounts of restricted cash held for unspent advertising funds, providing figures for different years. Reviewing these notes is crucial for prospective franchisees to understand the financial health and accounting practices of Goldfish Swim School.