Which sections of the Goldfish Swim School Franchise Agreement outline the franchisee's fee obligations?
Goldfish_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
17.1 Actions to be Taken
Except as otherwise provided herein, upon termination or expiration, this Agreement and all rights granted hereunder to Franchisee shall terminate and Franchisee shall:
- 17.1.4 pay all sums owing to Franchisor and any Affiliate. In the event of termination for any default of Franchisee, such sums shall include, but not be limited to, all damages, costs and expenses, including reasonable attorneys' fees with respect to litigation, arbitration, appellate or bankruptcy proceedings, unpaid Royalty Fees, loss of future Royalty Fee payments incurred by Franchisor as result of any early termination of this Agreement, and any other amounts due to Franchisor or any Affiliate;
Should Franchisee fail to commence operations of the Approved Location for the Franchised Swim School within the Development Period, Franchisor has the right to terminate this Agreement. If this Agreement is terminated pursuant to this Section 5.7, Franchisor shall retain the entire Franchise Fee and Real Estate Fee paid by Franchisee.
Development Fee - a fee equal to the sum of one hundred percent (100%) of the Initial Franchise Fee ($50,000) for the first franchised swim school to be developed under the Development
Schedule, plus one-half of the Initial Franchise Fee (reduced to $40,000) for each additional franchised swim school required to be developed thereafter pursuant to the Development Schedule.
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 30–32)
What This Means (2025 FDD)
According to the 2025 Goldfish Swim School FDD, several sections outline the franchisee's fee obligations. Note 1 of the Consolidated Financial Statements details the initial franchise fee, which is $50,000 for the first franchise. However, the franchise fee is reduced for each additional franchise a franchisee opens. In addition to the initial investment, franchisees must pay a monthly royalty fee of 6% of gross sales, as well as a brand fund contribution of up to 2% of gross sales.
Item 23 discusses actions to be taken upon termination or expiration of the agreement. Specifically, section 17.1.4 states that the franchisee must pay all sums owing to the franchisor or any affiliate. This includes damages, costs, expenses, attorney's fees, unpaid royalty fees, loss of future royalty fee payments, and any other amounts due. Section 5.7 discusses the failure to open a Goldfish Swim School. If the franchisee fails to commence operations within the development period, Goldfish Swim School has the right to terminate the agreement. In this case, Goldfish Swim School will retain the entire franchise fee and real estate fee paid by the franchisee.
Item 22 defines the Development Fee as the sum of 100% of the Initial Franchise Fee ($50,000) for the first swim school, plus one-half of the Initial Franchise Fee (reduced to $40,000) for each additional swim school required to be developed under the Development Schedule. These sections collectively define the various fees a franchisee is obligated to pay, both during the operation of the franchise and in specific circumstances such as termination or failure to open.