How does Section 8.C relate to the transfer limitations for a Goldfish Swim School Developer?
Goldfish_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor has the right, without liability of any kind or nature whatsoever to Developer, to make available for inspection by any intended transferee of Developer all or any part of Franchisor's records relating to this Agreement, the Franchised Swim Schools developed under this Agreement, or to the history of the relationship of the parties hereto.
Developer hereby specifically consents to such disclosure by Franchisor and shall release and hold Franchisor harmless from and against any claim, loss or injury resulting from an inspection of Franchisor's records relating to this Agreement or the Franchised Swim Schools developed by Developer, by an intended transferee identified by Developer.
Source: Item 22 — CONTRACTS (FDD pages 76–77)
What This Means (2025 FDD)
According to the 2025 Goldfish Swim School FDD, Section 8.C outlines the franchisor's right to inspect records related to the Area Development Agreement and the franchised swim schools developed under it, without incurring any liability. This section is relevant to transfer limitations because it allows Goldfish Swim School to provide potential transferees with access to the developer's records, aiding their assessment of the business before a transfer occurs. The developer specifically consents to this disclosure and agrees to hold Goldfish Swim School harmless from any claims, losses, or injuries resulting from the inspection of these records by an intended transferee.
This provision enables Goldfish Swim School to maintain transparency and provide potential buyers with comprehensive information, which can facilitate smoother and more informed transfer processes. By allowing inspection of records, Goldfish Swim School ensures that potential transferees are aware of the business's history and performance, reducing the risk of future disputes or misunderstandings. This also protects Goldfish Swim School from potential liabilities related to information disclosed during the transfer process, as the developer agrees to hold them harmless.
For a prospective franchisee, this means that if they decide to sell their Goldfish Swim School development rights, Goldfish Swim School has the right to show potential buyers all relevant records. This can be beneficial as it provides credibility and transparency to the sale process. However, it also means that the franchisee must maintain accurate and complete records, as these will be subject to scrutiny by potential buyers. The franchisee also relinquishes any right to hold Goldfish Swim School liable for any issues arising from the disclosure of these records to potential transferees.