What is the term of a Goldfish Swim School franchise transferred to a Controlled Entity?
Goldfish_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
18.3.1 If Franchisee wishes to transfer this Agreement or any interest herein to a corporation, limited liability company or other legal entity which shall be entirely owned by Franchisee ("Controlled Entity"), which Controlled Entity is being formed for the financial planning, tax or other convenience of Franchisee, Franchisor's consent to such transfer shall be conditioned upon the satisfaction of the following requirements:
18.3.1.1 the Controlled Entity is newly organized and its charter or articles of formation provides that its activities are confined exclusively to the operation of the Franchised Swim School;
18.3.1.2 Franchisee or all holders of a legal or beneficial interest in Franchisee own all of the equity and voting power of the outstanding stock or other capital interest in the Controlled Entity, and there is no change in the Control Person;
18.3.1.3 all obligations of Franchisee to Franchisor or any Affiliate are fully paid and satisfied; provided, however, that neither Franchisee nor the Controlled Entity shall be required to pay a transfer fee as required pursuant to Section 18.2.8;
18.3.1.4 the Controlled Entity has entered into a written agreement with Franchisor expressly assuming the obligations of this Agreement and all other agreements relating to the operation of the Franchised Swim School.
If the consent of any other party to any such other agreement is required, Franchisee has obtained such written consent and provided the same to Franchisor prior to consent by Franchisor;
18.3.1.5 all holders of a legal or beneficial interest in the Controlled Entity have entered into an agreement with Franchisor jointly and severally guaranteeing the full payment of the Controlled Entity's obligations to Franchisor and the performance by the Controlled Entity of all the obligations of this Agreement;
18.3.1.6 each stock certificate or other ownership interest certificate of the Controlled Entity has conspicuously endorsed upon the face thereof a statement in a form satisfactory to Franchisor that it is held subject to, and that further assignment or transfer thereof is subject to, all restrictions imposed upon transfers and assignments by this Agreement; and
Source: Item 23 — RECEIPTS (FDD pages 77–389)
What This Means (2025 FDD)
The 2025 Goldfish Swim School Franchise Disclosure Document does not explicitly state the term length of a franchise agreement when transferred to a Controlled Entity. However, it does outline the conditions under which Goldfish Swim School will consent to such a transfer.
According to the FDD, if a franchisee wishes to transfer their agreement to a Controlled Entity (a corporation, LLC, or other legal entity wholly owned by the franchisee for financial planning, tax, or other convenience), Goldfish Swim School's consent is contingent upon several requirements. These include the Controlled Entity being newly organized and focused solely on operating the Franchised Swim School, the franchisee maintaining complete ownership and control of the Controlled Entity, and all obligations to Goldfish Swim School being fully satisfied.
Additionally, the Controlled Entity must enter into a written agreement assuming all obligations of the original franchise agreement, and all holders of interest in the Controlled Entity must guarantee the entity's obligations to Goldfish Swim School. The stock certificates or ownership interest certificates must also indicate that they are subject to the transfer restrictions outlined in the agreement. Because the FDD does not specify the term length, it is implied that the term remains the same as the original agreement.