When preparing the consolidated financial statements, what evaluation is management required to perform regarding the company's ability to continue as a going concern for Goldfish Swim School?

According to the 2025 FDD, when preparing the consolidated financial statements, Goldfish Swim School's management is required to evaluate whether there are conditions or events that raise substantial doubt about the company's ability to continue as a going concern. This evaluation considers all conditions and events in the aggregate and assesses the company's viability within one year after the consolidated financial statements are issued or available to be issued. This is a standard accounting practice to ensure that the financial statements provide an accurate representation of the company's financial health and future prospects.

This evaluation is a critical component of financial reporting, as it directly impacts the confidence that investors, franchisees, and other stakeholders have in Goldfish Swim School. If management identifies conditions that raise substantial doubt, it must disclose these conditions in the financial statements, along with its plans to address them. Failure to properly assess and disclose such conditions could lead to inaccurate financial reporting and potential legal or financial repercussions.

For a prospective franchisee, this requirement indicates that Goldfish Swim School's financial stability is regularly scrutinized. The evaluation helps ensure that the company is transparent about its financial health, which can provide reassurance to franchisees who are investing in the brand. It is important for potential franchisees to review these financial statements and any related disclosures to understand the company's financial position and assess the risks associated with investing in a Goldfish Swim School franchise.