Does Goldfish Swim School require franchisees to acknowledge that the restrictive covenants are essential to the franchise agreement?
Goldfish_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
- 17.2.1 Franchisee acknowledges that the restrictive covenants contained in this Section and in Section 7 are fair and reasonable and are justifiably required for purposes including, but not limited to, the following:
- 17.2.1.1 to protect the Trade Secrets and other Confidential Information of Franchisor;
- 17.2.1.2 to induce Franchisor to grant a Franchise to Franchisee; and
- 17.2.1.3 to protect Franchisor against its costs in training Franchisee and its officers, directors, executives, professional staff, Designated Managers, and on-site general manager if different from the Designated Manager.
Source: Item 23 — RECEIPTS (FDD pages 77–389)
What This Means (2025 FDD)
According to Goldfish Swim School's 2025 Franchise Disclosure Document, franchisees must acknowledge the fairness and reasonableness of the restrictive covenants within the franchise agreement. Specifically, franchisees recognize that these covenants are justifiably required to protect Goldfish Swim School's trade secrets and confidential information.
This acknowledgement also serves to recognize that the restrictive covenants are part of what induced Goldfish Swim School to grant the franchise in the first place. Furthermore, the covenants protect Goldfish Swim School against the costs associated with training the franchisee and their staff, including officers, directors, executives, professional staff, designated managers, and on-site general managers.
This requirement ensures that franchisees understand and agree to the importance of these protections for the Goldfish Swim School system. It also highlights the mutual understanding that the franchisor is investing significantly in the franchisee's training and the protection of proprietary information, which justifies the need for post-term non-compete obligations.