Is a transfer fee required when transferring a Goldfish Swim School franchise to a Controlled Entity?
Goldfish_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
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;
Source: Item 23 — RECEIPTS (FDD pages 77–389)
What This Means (2025 FDD)
According to the 2025 Goldfish Swim School Franchise Disclosure Document, a transfer fee is not required when transferring a franchise to a Controlled Entity. A Controlled Entity is defined as a corporation, limited liability company, or other legal entity entirely owned by the franchisee, formed for financial planning, tax, or other convenience.
For Goldfish Swim School to approve such a transfer, the Controlled Entity must be newly organized and dedicated exclusively to operating the franchised swim school. The franchisee must retain full ownership and voting power within the Controlled Entity, with no changes to the Control Person. All obligations of the franchisee to Goldfish Swim School or any affiliate must be fully satisfied.
The Controlled Entity must enter into a written agreement assuming all obligations of the original franchise agreement, and all holders of legal or beneficial interest in the Controlled Entity must guarantee the entity's obligations to Goldfish Swim School. Additionally, each ownership certificate of the Controlled Entity must clearly state that it is subject to all transfer restrictions imposed by the franchise agreement. These conditions ensure that the transfer to a Controlled Entity does not diminish Goldfish Swim School's rights or financial security while allowing franchisees to manage their business affairs efficiently.