What services does Goldfish Swim School provide to MFO, in addition to processing and disbursing payroll?
Goldfish_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
alances are disclosed in Note 7.
The Company leases a building from MFP and for the year ended December 31, 2020 was a guarantor of the related bank notes totaling $1,627,147. The bank notes were refinanced during 2021, and the Company is no longer a guarantor. The risks and impacts to the financial position, financial performance, and cash flows of the Company are limited to lease payments and the related balances disclosed in Note 7.
The Company processes and disburses payroll on behalf of MFO. Beginning in 2022, the Company has guaranteed certain bank loans to MFO. In the event of a default by MFO, the Company could be obligated to repay the full amount outstanding on these loans. As of December 31, 2022, the balance outstanding on the guaranteed loans was $2,000,000, with the maximum potential future obligations under this guarantee totaling $4,500,000 and payable through August 10, 2028. In the event the Company is required to make payments under this guarantee, the Company could seek to recover those amounts from MFO; however, the Company does not hold specific recourse or collateral rights in connection with
Source: Item 22 — CONTRACTS (FDD pages 76–77)
What This Means (2025 FDD)
According to the 2025 Goldfish Swim School Franchise Disclosure Document, besides processing and disbursing payroll on behalf of MFO, the company has guaranteed certain bank loans to MFO beginning in 2022. As of December 31, 2022, the balance outstanding on these guaranteed loans was $2,000,000, with maximum potential future obligations under this guarantee totaling $4,500,000 and payable through August 10, 2028.
In the event of a default by MFO, Goldfish Swim School could be obligated to repay the full amount outstanding on these loans. The company could seek to recover those amounts from MFO; however, Goldfish Swim School does not hold specific recourse or collateral rights in connection with the guarantee.
As of December 31, 2022, Goldfish Swim School was unaware of any circumstances that would require performance under this guarantee. The risks and impacts to the financial position, financial performance, and cash flows of the Company are limited to the amount receivable from MFO to reimburse the Company for payroll expenses, the related balances disclosed in Note 7, and the balance of the bank loans being guaranteed by the Company. This arrangement presents a potential financial risk for Goldfish Swim School, should MFO default on its loans.