What is a 'system-wide supply contract' in the context of a Goldfish Swim School franchise?
Goldfish_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor may, in the exercise of its business judgment, enter into supply contracts either for all Swim Schools or a subset of Swim Schools situated within one or more geographic region(s) (each, a "system-wide supply contract"). Franchisor may enter into system-wide supply contracts with one or more vendors or products, services or equipment that all Franchised Swim Schools in a geographic area will be required to purchase, use or sell. If Franchisor does so, then immediately upon notification to Franchisee, Franchisee and all other franchised swim schools in the geographic area must purchase the specified product, service or equipment only from the designated supplier. However, if at the time of the notification to Franchisee, Franchisee is already a party to a non-terminable supply contract with another vendor or supplier for the product, service or equipment, then Franchisee's obligation to purchase from the designated supplier under the system-wide supply contract will not begin until the scheduled expiration (or earlier termination) of the pre-existing contract. Franchisor makes no representation that Franchisor will enter into any system-wide supply contracts or other exclusive supply arrangements or, if Franchisor does so, that Franchisee would not otherwise be able to purchase the same products and/or services at a lower price from another supplier. Franchisor may add to, modify, substitute or discontinue system-wide supply contracts or exclusive supply arrangements in the exercise of Franchisor's business judgment.
Source: Item 23 — RECEIPTS (FDD pages 77–389)
What This Means (2025 FDD)
According to the 2025 Goldfish Swim School Franchise Disclosure Document, a 'system-wide supply contract' is an agreement that Goldfish Swim School may enter into, at its discretion, for all or a subset of swim schools within one or more geographic regions. These contracts are made with vendors for products, services, or equipment that all franchised Goldfish Swim Schools in a specific geographic area will be required to purchase, use, or sell.
If Goldfish Swim School establishes a system-wide supply contract, franchisees in the relevant geographic area must purchase the specified products, services, or equipment from the designated supplier immediately upon notification. However, there is an exception: if a franchisee already has a non-terminable supply contract with another vendor for the same product, service, or equipment at the time of notification, the franchisee's obligation to purchase from the designated supplier under the system-wide contract will be deferred until the existing contract expires or is terminated.
The FDD states that Goldfish Swim School does not guarantee that it will enter into any system-wide supply contracts or other exclusive supply arrangements. Furthermore, even if such contracts are established, there is no guarantee that franchisees would not be able to purchase the same products or services at a lower price from another supplier. Goldfish Swim School retains the right to add to, modify, substitute, or discontinue system-wide supply contracts or exclusive supply arrangements based on its business judgment. This means that franchisees must be prepared to adapt to changes in required suppliers and should carefully evaluate the potential impact of these requirements on their operating costs and profitability.