Big_Blue_Swim_School 2025 Franchise FAQ - FDD Ninja

Question 1

What does Big Blue Swim School do with the Brand Fund contributions?

Accepted Answer

for that Calculation Period.

We will direct all programs the Brand Fund finances, with sole control over and ownership of all creative and business aspects of the Fund's activities. The Brand Fund may pay for, among other things, preparing, producing, and placing video, audio, and written materials, digital marketing, and Social Media; developing, maintaining, and administering one or more System Websites; administering national, regional, and multi-regional marketing and advertising programs, including purchasing trade journal, direct mail, and other media advertising and using advertising, promotion, and marketing agencies and other advisors to provide assistance; implementing and supporting franchisees' local market introduction programs; establishing regional and national promotions and partnerships and hiring spokespersons to promote the BIG BLUE Swim School brand; supporting public relations, market research, and other advertising, promotion, marketing, and brand-related activities; creating and implementing customersatisfaction surveys; organizing and hosting franchisee conferences, conventions, and meetings; and supporting and hosting charitable or nonprofit events and community-based activities.

The Brand Fund may advertise locally, regionally, and/or nationally in printed and on other tangible materials, on radio or television, and/or on the Internet, as we think best. We and/or an outside regional or national advertising agency will produce all advertising and marketing. The Brand Fund periodically may give you sample Marketing Materials at no cost. We may sell you multiple copies of Marketing Materials at our direct production costs, plus any related shipping, handling, and storage charges.

We will account for the Brand Fund separately from our other funds (although we need not keep Brand Fund contributions in a separate bank account) and will not use the Brand Fund for any of our general operating expenses. However, the Brand Fund may reimburse us and our affiliates for the reasonable salaries and benefits of personnel who manage and administer, or

otherwise provide assistance or services to, the Brand Fund; the Brand Fund's administrative costs; travel-related expenses of personnel while they are on Brand Fund business; meeting costs; overhead relating to Brand Fund business; and other expenses we and our affiliates incur administering or directing the Brand Fund and its programs, including conducting market research, preparing Marketing Materials, collecting and accounting for Brand Fund contributions, paying taxes due on Brand Fund contributions we receive; and any other costs or expenses we incur operating or as a consequence of the Fund. We will not use the Brand Fund specifically to develop materials and programs to solicit franchisees. However, media, materials, and programs prepared using Brand Fund contributions may describe our franchise program, reference the availability of franchises and related information, and process franchise leads. Of the Brand Fund's 2024 expenditures, 18% was spent on digital marketing and public relations agencies, 7% was spent on search engine optimization, 2% was spent on social and creative, 10% was spent on marketing software, 10% was spent on strategic projects, and 53% was spent on overhead.

The Brand Fund is not a trust, and we do not owe you fiduciary obligations because we maintain, direct, or administer the Brand Fund or for any other reason.

The Brand Fund may spend in any fiscal year more or less than the total Brand Fund contributions during that year, borrow from us or others (paying reasonable interest) to cover deficits, or invest any surplus for future use. Unspent monies in the Brand Fund at the end of the year will be rolled over for potential use in the following year. We have the right to use new Brand Fund contributions to pay Brand Fund deficits incurred during previous years. We will use all interest earned on Brand Fund contributions to pay costs before using the Brand Fund's other assets. We will prepare an annual, unaudited statement of Brand Fund collections and expenses and share the statement electronically within ninety (90) days after our fiscal-year end or otherwise give you a copy of the statement upon reasonable request. We have the right (but no obligation) to have the Brand Fund audited annually, at the Brand Fund's expense, by a certified public accountant we designate. We have the right to incorporate the Brand Fund or operate it through a separate entity whenever we deem appropriate. The successor entity will have all of the rights and duties specified here.

The Brand Fund's principal purposes are to maximize recognition of the Marks, increase patronage of BIG BLUE Swim Schools, and enhance, promote, and protect the BIG BLUE Swim School brand and franchise system.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 37–51)

Question 2

What are the conditions for Big Blue Swim School relocation approval?

Accepted Answer

ound and secured within those 210 days.

You may operate the School only at the accepted site. You may not relocate the School without our prior written consent, which we have the right to grant or deny as we deem best. Whether or not we will allow relocation depends on circumstances at the time and what is in the School's and our system's best interests. Factors include, for example, the new site's market area, its proximity to other Schools in our system, whether you are complying with your Franchise Agreement, and how long it will take you to open at the new site.

Conditions for relocation approval are (1) the new site and its lease are acceptable to us, (2) you pay us a reasonable relocation fee not to exceed \$25,000, (3) you reimburse any costs we incur during the relocation process, (4) you confirm that your original Franchise Agreement remains in effect and governs the School's operation at the new site with no change in the franchise term or, at our option, you sign our then-current form of franchise agreement to govern the School's operation at the new site for a new franchise term, (5) you sign a general release, in a form satisfactory to us, of any and all claims against us and our owners, affiliates, officers, directors, employees, and agents, (6) you continue operating the School at its original site until we authorize its closure, and (7) you de-brand and de-identify the School's former premises within the timeframe we specify and at your own expense so it no longer is associated in any manner (in our

Source: Item 12 — TERRITORY (FDD pages 51–55)

Question 3

Did any Big Blue Swim School franchised outlets cease operations for reasons other than termination or non-renewal between 2022 and 2024?

Accepted Answer

| Col. 1 | Col. 2 | Col. 3 | Col. 4 | Col. 5 | Col. 6 | Col. 7 | Col. 8 | Col. 9 |
|---|---|---|---|---|---|---|---|---|
| State | Year | Outlets at Start of Year | Outlets Opened | Termin- ations | Non- Renewals | Reacquired by Franchisor | Ceased Operations - Other Reasons | Outlets at End of the Year |
| Arizona | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2024 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
| Colorado | 2022 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Florida | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Col. 1 | Col. 2 | Col. 3 | Col. 4 | Col. 5 | Col. 6 | Col. 7 | Col. 8 | Col. 9 |
|---|---|---|---|---|---|---|---|---|
| State | Year | Outlets at Start of Year | Outlets Opened | Termin- ations | Non- Renewals | Reacquired by Franchisor | Ceased Operations - Other Reasons | Outlets at End of the Year |
| Illinois | 2022 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 1 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |
| Indiana | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Massachusetts | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Michigan | 2022 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 1 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |
| Missouri | 2022 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| New Jersey | 2022 | 0 | 2 | 0 | 0 | 0 | 0 | 2 |
|  | 2023 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |
| North | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Carolina |  |  |  |  |  |  |  |  |
|  | 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2024 | 0 | 3 | 0 | 0 | 0 | 0 | 3 |
| Pennsylvania | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 2 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 1 | 0 | 0 | 0 | 0 | 3 |
| Col. 1 | Col. 2 | Col. 3 | Col. 4 | Col. 5 | Col. 6 | Col. 7 | Col. 8 | Col. 9 |
|---|---|---|---|---|---|---|---|---|
| State | Year | Outlets at Start of Year | Outlets Opened | Termin- ations | Non- Renewals | Reacquired by Franchisor | Ceased Operations - Other Reasons | Outlets at End of the Year |
| Texas | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2024 | 0 | 2 | 0 | 0 | 0 | 0 | 2 |
| Utah | 2022 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 1 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 1 | 0 | 0 | 0 | 0 | 3 |
| Totals | 2022 | 1 | 6 | 0 | 0 | 0 | 0 | 7 |
|  | 2023 | 7 | 8 | 0 | 0 | 0 | 0 | 15 |
|  | 2024 | 15 | 8 | 0 | 0 | 0 | 0 | 23 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 70–75)

Question 4

Were any Big Blue Swim School franchises reacquired by the franchisor in 2024?

Accepted Answer

| Col. 1 | Col. 2 | Col. 3 | Col. 4 | Col. 5 | Col. 6 | Col. 7 | Col. 8 | Col. 9 |
|---|---|---|---|---|---|---|---|---|
| State | Year | Outlets at Start of Year | Outlets Opened | Termin- ations | Non- Renewals | Reacquired by Franchisor | Ceased Operations - Other Reasons | Outlets at End of the Year |
| Arizona | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2024 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
| Colorado | 2022 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Florida | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Col. 1 | Col. 2 | Col. 3 | Col. 4 | Col. 5 | Col. 6 | Col. 7 | Col. 8 | Col. 9 |
|---|---|---|---|---|---|---|---|---|
| State | Year | Outlets at Start of Year | Outlets Opened | Termin- ations | Non- Renewals | Reacquired by Franchisor | Ceased Operations - Other Reasons | Outlets at End of the Year |
| Illinois | 2022 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 1 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |
| Indiana | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Massachusetts | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Michigan | 2022 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 1 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |
| Missouri | 2022 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| New Jersey | 2022 | 0 | 2 | 0 | 0 | 0 | 0 | 2 |
|  | 2023 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |
| North | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Carolina |  |  |  |  |  |  |  |  |
|  | 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2024 | 0 | 3 | 0 | 0 | 0 | 0 | 3 |
| Pennsylvania | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 2 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 1 | 0 | 0 | 0 | 0 | 3 |
| Col. 1 | Col. 2 | Col. 3 | Col. 4 | Col. 5 | Col. 6 | Col. 7 | Col. 8 | Col. 9 |
|---|---|---|---|---|---|---|---|---|
| State | Year | Outlets at Start of Year | Outlets Opened | Termin- ations | Non- Renewals | Reacquired by Franchisor | Ceased Operations - Other Reasons | Outlets at End of the Year |
| Texas | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2024 | 0 | 2 | 0 | 0 | 0 | 0 | 2 |
| Utah | 2022 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 1 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 1 | 0 | 0 | 0 | 0 | 3 |
| Totals | 2022 | 1 | 6 | 0 | 0 | 0 | 0 | 7 |
|  | 2023 | 7 | 8 | 0 | 0 | 0 | 0 | 15 |
|  | 2024 | 15 | 8 | 0 | 0 | 0 | 0 | 23 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 70–75)

Question 5

Did any Big Blue Swim School franchises terminate in 2023?

Accepted Answer

| Col. 1 | Col. 2 | Col. 3 | Col. 4 | Col. 5 | Col. 6 | Col. 7 | Col. 8 | Col. 9 |
|---|---|---|---|---|---|---|---|---|
| State | Year | Outlets at Start of Year | Outlets Opened | Termin- ations | Non- Renewals | Reacquired by Franchisor | Ceased Operations - Other Reasons | Outlets at End of the Year |
| Arizona | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2024 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
| Colorado | 2022 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Florida | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Col. 1 | Col. 2 | Col. 3 | Col. 4 | Col. 5 | Col. 6 | Col. 7 | Col. 8 | Col. 9 |
|---|---|---|---|---|---|---|---|---|
| State | Year | Outlets at Start of Year | Outlets Opened | Termin- ations | Non- Renewals | Reacquired by Franchisor | Ceased Operations - Other Reasons | Outlets at End of the Year |
| Illinois | 2022 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 1 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |
| Indiana | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Massachusetts | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Michigan | 2022 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 1 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |
| Missouri | 2022 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| New Jersey | 2022 | 0 | 2 | 0 | 0 | 0 | 0 | 2 |
|  | 2023 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |
| North | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Carolina |  |  |  |  |  |  |  |  |
|  | 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2024 | 0 | 3 | 0 | 0 | 0 | 0 | 3 |
| Pennsylvania | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 2 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 1 | 0 | 0 | 0 | 0 | 3 |
| Col. 1 | Col. 2 | Col. 3 | Col. 4 | Col. 5 | Col. 6 | Col. 7 | Col. 8 | Col. 9 |
|---|---|---|---|---|---|---|---|---|
| State | Year | Outlets at Start of Year | Outlets Opened | Termin- ations | Non- Renewals | Reacquired by Franchisor | Ceased Operations - Other Reasons | Outlets at End of the Year |
| Texas | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2024 | 0 | 2 | 0 | 0 | 0 | 0 | 2 |
| Utah | 2022 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 1 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 1 | 0 | 0 | 0 | 0 | 3 |
| Totals | 2022 | 1 | 6 | 0 | 0 | 0 | 0 | 7 |
|  | 2023 | 7 | 8 | 0 | 0 | 0 | 0 | 15 |
|  | 2024 | 15 | 8 | 0 | 0 | 0 | 0 | 23 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 70–75)

Question 6

How many company-owned Big Blue Swim School outlets were sold to franchisees between 2022 and 2024?

Accepted Answer

| Col. 1 State | Col. 2 Year | Col. 3 Outlets at Start of the Year | Col. 4 Outlets Opened | Col. 5 Outlets Reacquired From Franchisee | Col. 6 Outlets Closed | Col. 7 Outlets Sold to Franchisee | Col. 8 Outlets at End of the Year |
|---|---|---|---|---|---|---|---|
| California | 2022 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 1 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 2 | 0 | 0 | 0 | 3 |
| Georgia | 2022 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 1 | 0 | 0 | 0 | 2 |
| Col. 1 State | Col. 2 Year | Col. 3 Outlets at Start of the Year | Col. 4 Outlets Opened | Col. 5 Outlets Reacquired From Franchisee | Col. 6 Outlets Closed | Col. 7 Outlets Sold to Franchisee | Col. 8 Outlets at End of the Year |
|---|---|---|---|---|---|---|---|
| Illinois | 2022 | 5 | 0 | 0 | 0 | 0 | 5 |
|  | 2023 | 5 | 0 | 0 | 0 | 0 | 5 |
|  | 2024 | 5 | 0 | 0 | 0 | 0 | 5 |
| Maryland | 2022 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2024 | 0 | 1 | 0 | 0 | 0 | 1 |
| Texas | 2022 | 0 | 1 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 1 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 1 | 0 | 0 | 0 | 3 |
| Virginia | 2022 | 3 | 1 | 0 | 0 | 0 | 4 |
|  | 2023 | 4 | 1 | 0 | 0 | 0 | 5 |
|  | 2024 | 5 | 0 | 0 | 0 | 0 | 5 |
| Totals | 2022 | 9 | 2 | 0 | 0 | 0 | 11 |
|  | 2023 | 11 | 3 | 0 | 0 | 0 | 14 |
|  | 2024 | 14 | 5 | 0 | 0 | 0 | 19 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 70–75)

Question 7

How many Big Blue Swim School outlets ceased operations for reasons other than termination, non-renewal, or reacquisition in 2022?

Accepted Answer

| Col. 7 | Col. 8 | Col. 9 |
|---|---|---|---|---|---|---|---|---|
| State | Year | Outlets at Start of Year | Outlets Opened | Termin- ations | Non- Renewals | Reacquired by Franchisor | Ceased Operations - Other Reasons | Outlets at End of the Year |
| Arizona | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2024 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
| Colorado | 2022 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Florida | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Col. 1 | Col. 2 | Col. 3 | Col. 4 | Col. 5 | Col. 6 | Col. 7 | Col. 8 | Col. 9 |
|---|---|---|---|---|---|---|---|---|
| State | Year | Outlets at Start of Year | Outlets Opened | Termin- ations | Non- Renewals | Reacquired by Franchisor | Ceased Operations - Other Reasons | Outlets at End of the Year |
| Illinois | 2022 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 1 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |
| Indiana | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Massachusetts | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 70–75)

Question 8

How many Big Blue Swim School outlets closed between 2022 and 2024?

Accepted Answer

| Col. 1 State | Col. 2 Year | Col. 3 Outlets at Start of the Year | Col. 4 Outlets Opened | Col. 5 Outlets Reacquired From Franchisee | Col. 6 Outlets Closed | Col. 7 Outlets Sold to Franchisee | Col. 8 Outlets at End of the Year |
|---|---|---|---|---|---|---|---|
| California | 2022 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 1 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 2 | 0 | 0 | 0 | 3 |
| Georgia | 2022 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 1 | 0 | 0 | 0 | 2 |
| Col. 1 State | Col. 2 Year | Col. 3 Outlets at Start of the Year | Col. 4 Outlets Opened | Col. 5 Outlets Reacquired From Franchisee | Col. 6 Outlets Closed | Col. 7 Outlets Sold to Franchisee | Col. 8 Outlets at End of the Year |
|---|---|---|---|---|---|---|---|
| Illinois | 2022 | 5 | 0 | 0 | 0 | 0 | 5 |
|  | 2023 | 5 | 0 | 0 | 0 | 0 | 5 |
|  | 2024 | 5 | 0 | 0 | 0 | 0 | 5 |
| Maryland | 2022 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2024 | 0 | 1 | 0 | 0 | 0 | 1 |
| Texas | 2022 | 0 | 1 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 1 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 1 | 0 | 0 | 0 | 3 |
| Virginia | 2022 | 3 | 1 | 0 | 0 | 0 | 4 |
|  | 2023 | 4 | 1 | 0 | 0 | 0 | 5 |
|  | 2024 | 5 | 0 | 0 | 0 | 0 | 5 |
| Totals | 2022 | 9 | 2 | 0 | 0 | 0 | 11 |
|  | 2023 | 11 | 3 | 0 | 0 | 0 | 14 |
|  | 2024 | 14 | 5 | 0 | 0 | 0 | 19 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 70–75)

Question 9

How many Big Blue Swim School outlets opened in total during 2023?

Accepted Answer

| Outlet Type | Year | Column 3 | Column 4 | Net Change |
|---|---|---|---|---|
|  |  | Outlets at the Start of the Year | Outlets at the End of the Year |  |
| Franchised | 2022 | 1 | 7 | +6 |
|  | 2023 | 7 | 15 | +8 |
|  | 2024 | 15 | 23 | +8 |
| Company-Owned | 2022 | 9 | 11 | +2 |
|  | 2023 | 11 | 14 | +3 |
|  | 2024 | 14 | 19 | +5 |
| Total Outlets | 2022 | 10 | 18 | +8 |
|  | 2023 | 18 | 29 | +11 |
|  | 2024 | 29 | 42 | +13 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 70–75)

Question 10

How many Big Blue Swim School outlets were operating at the start of 2022?

Accepted Answer

Table No. 1 **Systemwide Outlet Summary For years 2022 to 2024**

| Outlet Type | Year | Column 3 | Column 4 | Net Change |
|---|---|---|---|---|
|  |  | Outlets at the Start of the Year | Outlets at the End of the Year |  |
| Franchised | 2022 | 1 | 7 | +6 |
|  | 2023 | 7 | 15 | +8 |
|  | 2024 | 15 | 23 | +8 |
| Company-Owned | 2022 | 9 | 11 | +2 |
|  | 2023 | 11 | 14 | +3 |
|  | 2024 | 14 | 19 | +5 |
| Total Outlets | 2022 | 10 | 18 | +8 |
|  | 2023 | 18 | 29 | +11 |
|  | 2024 | 29 | 42 | +13 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 70–75)

Question 11

How many Big Blue Swim School outlets were reacquired from franchisees between 2022 and 2024?

Accepted Answer

| Col. 1 State | Col. 2 Year | Col. 3 Outlets at Start of the Year | Col. 4 Outlets Opened | Col. 5 Outlets Reacquired From Franchisee | Col. 6 Outlets Closed | Col. 7 Outlets Sold to Franchisee | Col. 8 Outlets at End of the Year |
|---|---|---|---|---|---|---|---|
| California | 2022 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 1 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 2 | 0 | 0 | 0 | 3 |
| Georgia | 2022 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 1 | 0 | 0 | 0 | 2 |
| Col. 1 State | Col. 2 Year | Col. 3 Outlets at Start of the Year | Col. 4 Outlets Opened | Col. 5 Outlets Reacquired From Franchisee | Col. 6 Outlets Closed | Col. 7 Outlets Sold to Franchisee | Col. 8 Outlets at End of the Year |
|---|---|---|---|---|---|---|---|
| Illinois | 2022 | 5 | 0 | 0 | 0 | 0 | 5 |
|  | 2023 | 5 | 0 | 0 | 0 | 0 | 5 |
|  | 2024 | 5 | 0 | 0 | 0 | 0 | 5 |
| Maryland | 2022 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2024 | 0 | 1 | 0 | 0 | 0 | 1 |
| Texas | 2022 | 0 | 1 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 1 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 1 | 0 | 0 | 0 | 3 |
| Virginia | 2022 | 3 | 1 | 0 | 0 | 0 | 4 |
|  | 2023 | 4 | 1 | 0 | 0 | 0 | 5 |
|  | 2024 | 5 | 0 | 0 | 0 | 0 | 5 |
| Totals | 2022 | 9 | 2 | 0 | 0 | 0 | 11 |
|  | 2023 | 11 | 3 | 0 | 0 | 0 | 14 |
|  | 2024 | 14 | 5 | 0 | 0 | 0 | 19 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 70–75)

Question 12

How many Big Blue Swim School outlets were sold to franchisees between 2022 and 2024?

Accepted Answer

Table No. 3

## **Status of Franchised Outlets For years 2022 to 2024**

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 70–75)

Question 13

What is the projected total amount to be received by Big Blue Swim School, according to the financial statement?

Accepted Answer

tions.

#### NOTE 9. RELATED-PARTY TRANSACTION

#### Related-party transactions

The Company's largest developer is an affiliated entity through common ownership. Accordingly, in the normal course of business, the Company regularly executes franchise agreements with the affiliated developer pursuant to a development agreement. As a result of these transactions, revenues from these related-party franchises amounted to \$609,741, \$1,471,387 and \$900,039 for each of the years in the three-year period ended December 31, 2024, respectively, and are included in ''Revenues'' in the accompanying statements of operations and member's deficit. Receivables from these related-party franchises amounted to \$1,947 and \$88,618 as of December 31, 2024 and 2023, respectively. These amounts are included

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 75)

Question 14

What are Big Blue Swim School's rights and obligations upon termination or expiration of the franchise agreement, as described starting on page 53?

Accepted Answer

ur (or our designee's) purchase of the School's assets; or (ii) if we do not exercise the option under Section 20.G, the date upon which that option expires or we notify you of our decision not to exercise, or to withdraw our previous exercise, of that option, whichever occurs first.

#### **20.C. Confidential Information**

Upon termination or expiration of this Agreement, you and your owners must immediately cease using any of our Confidential Information in any business or otherwise and return to us all copies of the Operations Manual and any other confidential materials to which we gave you access. You may not sell, trade, or otherwise profit in any way from any Consumer Data or other Confidential Information at any time after expiration or termination of this Agreement.

#### **20.D. Notification to Customers**

Upon termination or expiration of this Agreement, we have the right to contact (at our expense) previous, current, and prospective customers to inform them that a BIG BLUE Swim School no longer will operate at the School's location or, if we intend to exercise the option under Section 20.G, that the School will operate under new management. We also have the right to inform them of other nearby BIG BLUE Swim Schools. Exercising these rights will not constitute interference with your contractual or business relationship with those customers.

#### **20.E. Non-Solicitation**

Upon our termination of this Agreement in compliance with its terms, your termination of this Agreement without cause, or expiration of this Agreement (without the grant of a successor franchise), you and your owners agree that you and they will not for at least one (1) year after the effective date of termination or expiration solicit any of our or our affiliates' employees to discontinue their employment with us or our affiliates.

#### **20.F. Covenant Not to Compete**

Upon our termination of this Agreement in compliance with its terms, your termination of this Agreement without cause, or expiration of this Agreement (without the grant of a successor franchise), you and your owners agree that neither you, they, nor any member of your or their Immediate Families will:

- 1. have any direct or indirect, controlling or non-controlling interest as an owner whether of record, beneficial, or otherwise—in any Competitive Business located or operating:
  - a. at the School's site; or
  - b. within ten (10) miles of the School's site; or
- c. within ten (10) miles of the physical location of another BIG BLUE Swim School in operation or under construction on the later of the effective date of termination or expiration or the date on which the restricted person begins to comply with this Section 20.F,

provided that this restriction does not prohibit ownership of shares of a class of securities publicly traded on a United States stock exchange and representing less than three percent (3%) of the number of shares of that class of securities issued and outstanding; or

- 2. perform services as a director, officer, manager, employee, consultant, representative, or agent for a Competitive Business located or operating:
  - a. at the School's site; or

b. within ten (10) miles of the School's site; or

c.

Source: Item 22 — CONTRACTS (FDD pages 75–76)

Question 15

What was the total number of Big Blue Swim School franchised outlets at the end of 2023?

Accepted Answer

| Outlet Type | Year | Column 3 | Column 4 | Net Change |
|---|---|---|---|---|
|  |  | Outlets at the Start of the Year | Outlets at the End of the Year |  |
| Franchised | 2022 | 1 | 7 | +6 |
|  | 2023 | 7 | 15 | +8 |
|  | 2024 | 15 | 23 | +8 |
| Company-Owned | 2022 | 9 | 11 | +2 |
|  | 2023 | 11 | 14 | +3 |
|  | 2024 | 14 | 19 | +5 |
| Total Outlets | 2022 | 10 | 18 | +8 |
|  | 2023 | 18 | 29 | +11 |
|  | 2024 | 29 | 42 | +13 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 70–75)

Question 16

What was the total number of Big Blue Swim School franchised outlets opened in 2022?

Accepted Answer

| Outlet Type | Year | Column 3 | Column 4 | Net Change |
|---|---|---|---|---|
|  |  | Outlets at the Start of the Year | Outlets at the End of the Year |  |
| Franchised | 2022 | 1 | 7 | +6 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 70–75)

Question 17

What was the total number of Big Blue Swim School outlets at the end of 2023?

Accepted Answer

| Outlet Type | Year | Column 3 | Column 4 | Net Change |
|---|---|---|---|---|
|  |  | Outlets at the Start of the Year | Outlets at the End of the Year |  |
| Franchised | 2022 | 1 | 7 | +6 |
|  | 2023 | 7 | 15 | +8 |
|  | 2024 | 15 | 23 | +8 |
| Company-Owned | 2022 | 9 | 11 | +2 |
|  | 2023 | 11 | 14 | +3 |
|  | 2024 | 14 | 19 | +5 |
| Total Outlets | 2022 | 10 | 18 | +8 |
|  | 2023 | 18 | 29 | +11 |
|  | 2024 | 29 | 42 | +13 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 70–75)

Question 18

What was the total number of Big Blue Swim School outlets at the end of 2024?

Accepted Answer

| Outlet Type | Year | Column 3 | Column 4 | Net Change |
|---|---|---|---|---|
|  |  | Outlets at the Start of the Year | Outlets at the End of the Year |  |
| Franchised | 2022 | 1 | 7 | +6 |
|  | 2023 | 7 | 15 | +8 |
|  | 2024 | 15 | 23 | +8 |
| Company-Owned | 2022 | 9 | 11 | +2 |
|  | 2023 | 11 | 14 | +3 |
|  | 2024 | 14 | 19 | +5 |
| Total Outlets | 2022 | 10 | 18 | +8 |
|  | 2023 | 18 | 29 | +11 |
|  | 2024 | 29 | 42 | +13 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 70–75)

Question 19

What is the total projected number of new franchised Big Blue Swim School outlets expected to open in the next fiscal year across all states listed?

Accepted Answer

| State | Franchise Agreements Signed But Outlets Not Opened | Projected New Franchised Outlets In the Next Fiscal Year | Projected New Company-Owned Outlets In the Next Fiscal Year |
|---|---|---|---|
| California | 2 | 1 | 2 |
| Colorado | 2 | 1 | 0 |
| Florida | 1 | 0 | 0 |
| Georgia | 3 | 2 | 0 |
| Column 1 State | Column 2 Franchise Agreements Signed But Outlets Not Opened | Column 3 Projected New Franchised Outlets In the Next Fiscal Year | Column 4 Projected New Company-Owned Outlets In the Next Fiscal Year |
|---|---|---|---|
| Maryland | 1 | 1 | 0 |
| Michigan | 1 | 0 | 0 |
| New Jersey | 6 | 3 | 0 |
| New York | 2 | 0 | 0 |
| Pennsylvania | 1 | 1 | 0 |
| Texas | 2 | 1 | 0 |
| Total | 21 | 10 | 2 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 70–75)

Question 20

How does the initial franchise fee for Big Blue Swim School in Item 5 compare to the potential out-of-pocket expenses for site visits, as described in Item 6?

Accepted Answer

ase Rights.

You must locate, evaluate, and select each School's site. We will not search for or select the site for you. We will review potential School sites that you identify within the Territory and may, but have no obligation to, visit the Territory once (for no additional fee) to review potential sites for each BIG BLUE Swim School to be constructed and developed. We have the right to require you to reimburse our out-of-pocket expenses for each site visit after the first per-School visit. That payment is not refundable.

*[Item 6 begins on next page]*

## **Item 6 OTHER FEES**

| the site for you. We will review potential Sch | ool sites that you identify within the Territory and |
|---|---|
| may, but have no obligation to, visit the Territory once (for no additional fee) to review potential |  |
| sites for each | BIG BLUE Swim School to be constructed and developed. We have the right to |
| require you to reimburse our out-of-pocket expenses for each site visit after the first per-School |  |
| visit. That payment is not refundable.

Question 21

How does the initial franchise fee for Big Blue Swim School in Item 5 compare to the real estate site investigation costs in Item 7?

Accepted Answer

sive.

#### Notes:

- 1. The initial franchise fee is \$50,000 if you acquire franchise rights for just one BIG BLUE Swim School. No separate initial investment, other than the development fee, is required when you sign a Development Rights Agreement, although you of course must build the first BIG BLUE Swim School at a cost estimated to range as described in the chart above. Therefore, the low end of the total investment necessary to begin operation if you acquire development rights (for a minimum of 2 Schools) ranges from \$2,123,000 to \$ 3,775,500. The development fee is not refundable.
- 2. A standard BIG BLUE Swim School occupies approximately 6,000 to 10,000 square feet of leased space in a strip shopping center or free-standing location. The preferred trade area is densely populated by families with a large number of children under 12 years old within a 10 to 15-minute drive time. Rent depends on geographic location, size, local rental rates, businesses in the area, site profile, and other factors. Rents vary from market to market and likely will be higher in large metropolitan areas (for example, New York City, New York, Chicago, Illinois, and Los Angeles, California) than in suburban markets and smaller metropolitan areas. The low estimate assumes that you do not have to pre-pay the first month's rent. The high estimate assumes that your landlord requires you either to pay a security deposit or to pre-pay the first month's rent.

Question 22

How does the initial franchise fee for Big Blue Swim School in Item 5 compare to the total estimated initial investment range provided in Item 7, and what percentage does it represent?

Accepted Answer

sive.

#### Notes:

- 1. The initial franchise fee is \$50,000 if you acquire franchise rights for just one BIG BLUE Swim School. No separate initial investment, other than the development fee, is required when you sign a Development Rights Agreement, although you of course must build the first BIG BLUE Swim School at a cost estimated to range as described in the chart above. Therefore, the low end of the total investment necessary to begin operation if you acquire development rights (for a minimum of 2 Schools) ranges from \$2,123,000 to \$ 3,775,500. The development fee

Question 23

How does the initial franchise fee for Big Blue Swim School in Item 5 relate to the ongoing fees potentially incurred for site visits as described in Item 6?

Accepted Answer

You must locate, evaluate, and select each School's site. We will not search for or select the site for you. We will review potential School sites that you identify within the Territory and may, but have no obligation to, visit the Territory once (for no additional fee) to review potential sites for each BIG BLUE Swim School to be constructed and developed. We have the right to require you to reimburse our out-of-pocket expenses for each site visit after the first per-School visit. That payment is not refundable.

Question 24

How does the initial franchise fee for Big Blue Swim School in Item 5 relate to the ongoing royalties or other fees that franchisees must pay?

Accepted Answer

You must pay us a $50,000 initial franchise fee in a lump sum when you sign your Franchise Agreement. It is not refundable under any circumstances. We did not collect any initial franchise fees during 2024. (We charge a reduced initial franchise fee for the second and each subsequent BIG BLUE Swim School you develop under a Development Rights Agreement (see below)).

Despite the payment provisions above, we will defer your payment of the initial franchise fee until we have fulfilled all our initial obligations to you under this Agreement and you have commenced doing business. You must pay us the initial franchise fee on the day you open the BIG BLUE Swim School for business.

In accordance with the Company's standard franchise agreement, the Company has the right to charge its franchisees a brand fee of up to 3% of gross revenues. Currently, the Company has agreed to charge its franchisees a brand fee of 2% of gross revenues.

Franchisees signing our DRAs must sign our then-current form of Franchise Agreement for each additional BIG BLUE Swim School they develop under the DRA. While that form may differ substantially and materially year to year from the first Franchise Agreement they sign for their first BIG BLUE Swim School to be developed (our current version of Franchise Agreement is disclosed in this disclosure document), we commit to charge during the initial franchise term for each BIG BLUE Swim School you develop under the DRA the same Royalty, Brand Fund contribution, Software License Fee, Local Marketing Spending Requirement, and minimum required Market Introduction Program expense we charge you under the first Franchise Agreement you sign.

Question 25

How does the initial franchise fee for Big Blue Swim School in Item 5 relate to the overall profitability of the franchise?

Accepted Answer

Agreement

You must pay us a \$50,000 initial franchise fee in a lump sum when you sign your Franchise Agreement. It is not refundable under any circumstances. We did not collect any initial franchise fees during 2024. (We charge a reduced initial franchise fee for the second and each subsequent BIG BLUE Swim School you develop under a Development Rights Agreement (see below)).

You must conduct a public relations and market introduction program for the School. We expect this program to begin approximately 5 months before and to continue for approximately 3 months after the School opens (although we have the right to specify a different timeframe). We will consult with you about what type of public relations and market introduction program we believe is most suitable for your School and will create and implement the program for you. You must spend at least \$85,000 on the public relations and market introduction program, which includes approximately \$50,000 for production and media placement and approximately \$35,000 for a public-relations agency and our creation and implementation of the public relations and market introduction program for you. You must pay us (or at our direction) the \$85,000 at the times and in the installments we specify. We will spend for you the money dedicated for production and media placement in the School's market in compliance with the planned market introduction program. This payment is not r

Question 26

How does the initial franchise fee for Big Blue Swim School in Item 5 relate to the potential for building a legacy?

Accepted Answer

[Item 5: INITIAL FEES]

## **Item 5 INITIAL FEES**

#### Franchise Agreement

You must pay us a $50,000 initial franchise fee in a lump sum when you sign your Franchise Agreement. It is not refundable under any circumstances. We did not collect any initial franchise fees during 2024. (We charge a reduced initial franchise fee for the second and each subsequent BIG BLUE Swim School you develop under a Development Rights Agreement (see below)).

Franchisees signing our DRAs must sign our then-current form of Franchise Agreement for each additional BIG BLUE Swim School they develop under the DRA. While that form may differ substantially and materially year to year from the first Franchise Agreement they sign for their first BIG BLUE Swim School to be developed (our current version of Franchise Agreement is disclosed in this disclosure document), we commit to charge during the initial franchise term for each BIG BLUE Swim School you develop under the DRA the same Royalty, Brand Fund contribution, Software License Fee, Local Marketing Spending Requirement, and minimum required Market Introduction Program expense we charge you under the first Franchise Agreement you sign. However, if, when the next franchise agreement is signed, you and your Approved Affiliates are in default under the DRA or any franchise agreement then in effect with us for a BIG BLUE Swim School, then the amounts of these fees and payments will remain as specified under our then-current form of franchise agreement.

Despite the payment provisions above, we will defer your payment of the initial franchise fee due to us under the Franchise Agreement until we have fulfilled all our initial obligations to you under the Franchise Agreement and you have commenced operating the BIG BLUE Swim School. You must pay us the initial franchise fee on the day you begin operating your BIG BLUE Swim School.

However, each time you (or your Approved Affiliate) sign a franchise agreement for the next BIG BLUE Swim School to be constructed and developed within the Territory, we will apply the deposit related to that Swim School (which is part of the Development Fee) toward the initial franchise fee due for that Swim School (leaving only the balance of the initial franchise fee due at signing).

Question 27

How does the initial franchise fee for Big Blue Swim School in Item 5 relate to the potential for building a long-term, sustainable business?

Accepted Answer

Agreement

You must pay us a \$50,000 initial franchise fee in a lump sum when you sign your Franchise Agreement. It is not refundable under any circumstances. We did not collect any initial franchise fees during 2024. (We charge a reduced initial franchise fee for the second and each subsequent BIG BLUE Swim School you develop under a Development Rights Agreement (see below)).

You must conduct a public relations and market introduction program for the School. We expect this program to begin approximately 5 months before and to continue for approximately 3 months after the School opens (although we have the right to specify a different timeframe). We will consult with you about what type of public relations and market introduction program we believe is most suitable for your School and will create and implement the program for you. You must spend at least \$85,000 on the public relations and market introduction program, which includes approximately \$50,000 for production and media placement and approximately \$35,000 for a public-relations agency and our creation and implementation of the public relations and market introduction program for you. You must pay us (or at our direction) the \$85,000 at the times and in the installments we specify. We will spend for you the money dedicated for production and media placement in the School's market in compliance with the planned market introduction program. This payment is not refundable.

We provide initial training for 4 people for no additional fee. We have the right to charge our then-current training fee (currently ranging up to \$2,000) for each additional person you wish to send to initial training and for any required retraining of the original attendees. This payment is not r

Question 28

How does the initial franchise fee for Big Blue Swim School in Item 5 relate to the potential for creating a valuable asset?

Accepted Answer

Agreement

You must pay us a \$50,000 initial franchise fee in a lump sum when you sign your Franchise Agreement. It is not refundable under any circumstances. We did not collect any initial franchise fees during 2024. (We charge a reduced initial franchise fee for the second and each subsequent BIG BLUE Swim School you develop under a Development Rights Agreement (se

Question 29

How does the initial franchise fee for Big Blue Swim School in Item 5 relate to the potential for future growth and expansion of the franchise?

Accepted Answer

Agreement

You must pay us a \$50,000 initial franchise fee in a lump sum when you sign your Franchise Agreement. It is not refundable under any circumstances. We did not collect any initial franchise fees during 2024. (We charge a reduced initial franchise fee for the second and each subsequent BIG BLUE Swim School you develop under a Development Rights Agreement (se

Question 30

How does the initial franchise fee for Big Blue Swim School in Item 5 relate to the potential for generating passive income?

Accepted Answer

Agreement

You must pay us a \$50,000 initial franchise fee in a lump sum when you sign your Franchise Agreement. It is not refundable under any circumstances. We did not collect any initial franchise fees during 2024. (We charge a reduced initial franchise fee for the second and each subsequent BIG BLUE Swim School you develop under a Development Rights Agreement (see below)).

You must conduct a public relations and market introduction program for the School. We expect this program to begin approximately 5 months before and to continue for approximately 3 months after the School opens (although we have the right to specify a different timeframe). We will consult with you about what type of public relations and market introduction program we believe is most suitable for your School and will create and implement the program for you. You must spend at least \$85,000 on the public relations and market introduction program, which includes approximately \$50,000 for production and media placement and approximately \$35,000 for a public-relations agency and our creation and implementation of the public relations and market introduction program for you. You must pay us (or at our direction) the \$85,000 at the times and in the installments we specify. We will spend for you the money dedicated for production and media placement in the School's market in compliance with the planned market introduction program. This payment is not refundable.

We provide initial training for 4 people for no additional fee. We have the right to charge our then-current training fee (currently ranging up to \$2,000) for each additional person you wish to send to initial training and for any required retraining of the original attendees. This payment is not r

Question 31

How does the initial franchise fee for Big Blue Swim School in Item 5 relate to the potential for reduced fees for subsequent locations under a Development Rights Agreement?

Accepted Answer

Agreement**

If you sign our DRA because you commit to develop multiple BIG BLUE Swim Schools within a protected territory comprised of distinct geographical development areas, we currently charge a development fee that you must pay in full when you sign the DRA. The development fee equals the full \$50,000 initial franchise fee for the first School covered by the first Franchise Agreement you sign concurrently with the DRA, plus a \$15,000 deposit for each additional School you commit to develop under the DRA. You must pay the rest of the initial franchise fee for each School (that is, \$25,000) when you sign the Franchise Agreement for that School. The initial franchise fee for each School you commit to develop after the first one

Question 32

How does the initial franchise fee for Big Blue Swim School in Item 5 relate to the potential return on investment for the franchisee?

Accepted Answer

Agreement

You must pay us a \$50,000 initial franchise fee in a lump sum when you sign your Franchise Agreement. It is not refundable under any circumstances. We did not collect any initial franchise fees during 2024. (We charge a reduced initial franchise fee for the second and each subsequent BIG BLUE Swim School you develop under a Development Rights Agreement (see below)).

You must conduct a public relations and market introduction program for the School. We expect this program to begin approximately 5 months before and to continue for approximately 3 months after the School opens (although we have the right to specify a different timeframe). We will consult with you about what type of public relations and market introduction program we believe is most suitable for your School and will create and implement the program for you. You must spend at least \$85,000 on the public relations and market introduction program, which includes approximately \$50,000 for production and media placement and approximately \$35,000 for a public-relations agency and our creation and implementation of the public relations and market introduction program for you. You must pay us (or at our direction) the \$85,000 at the times and in the installments we specify. We will spend for you the money dedicated for production and media placement in the School's market in compliance with the planned market introduction program. This payment is not refundable.

We provide initial training for 4 people for no additional fee. We have the right to charge our then-current training fee (currently ranging up to \$2,000) for each additional person you wish to send to initial training and for any required retraining of the original attendees. This payment is not refundable.

If your Managing Owner, general manager, or assistant manager cancels participation in any training class that is part of the initial training we provide for no additional fee after granting you the franchise, you must pay us a cancellation fee. The cancellation fee is one-half of our thenapplicable training fee per person if the person cancels more than 2 weeks before the class or program is scheduled to begin and 100% of our then-applicable training fee per person if the person

cancels 2 weeks or less before the class or program is scheduled to begin. This fee, not to exceed \$2,000, is due immediately and is not refundable.

## **Development Rights Agreement**

If you sign our DRA because you commit to develop multiple BIG BLUE Swim Schools within a protected territory comprised of distinct geographical development areas, we currently charge a development fee that you must pay in full when you sign the DRA. The development fee equals the full \$50,000 initial franchise fee for the first School covered by the first Franchise Agreement you sign concurrently with the DRA, plus a \$15,000 deposit for each additional School you commit to develop under the DRA. You must pay the rest of the initial franchise fee for each School (that is, \$25,000) when you sign the Franchise Agreement for that School.

Question 33

How does the initial franchise fee for Big Blue Swim School in Item 5 relate to the potential for selling the franchise in the future?

Accepted Answer

Agreement

You must pay us a \$50,000 initial franchise fee in a lump sum when you sign your Franchise Agreement. It is not refundable under any circumstances. We did not collect any initial franchise fees during 2024. (We charge a reduced initial franchise fee for the second and each subsequent BIG BLUE Swim School you develop under a Development Rights Agreement (se

Question 34

What is the relationship between the initial franchise fee for Big Blue Swim School mentioned in Item 5 and the estimated initial investment range provided in Item 7?

Accepted Answer

sive.

#### Notes:

- 1. The initial franchise fee is \$50,000 if you acquire franchise rights for just one BIG BLUE Swim School. No separate initial investment, other than the development fee, is required when you sign a Development Rights Agreement, although you of course must build the first BIG BLUE Swim School at a cost estimated to range as described in the chart above. Therefore, the low end of the total investment necessary to begin operation if you acquire development rights (for a minimum of 2 Schools) ranges from \$2,123,000 to \$ 3,775,500. The development fee is not refundable.
- 2. A standard BIG BLUE Swim School occupies approximately 6,000 to 10,000 square feet of leased space in a strip shopping center or free-standing location. The preferred trade area is densely populated by families with a large number of children under 12 years old within a 10 to 15-minute drive time. Rent depends on geographic location, size, local rental rates, businesses in the area, site profile, and other factors. Rents vary from market to market and likely will be higher in large metropolitan areas (for example, New York City, New York, Chicago, Illinois, and Los Angeles, California) than in suburban markets and smaller metropolitan areas. The low estimate assumes that you do not have to pre-pay the first month's rent. The high estimate assumes that your landlord requires you either to pay a security deposit or to pre-pay the first month's rent.

Question 35

For the three-year period ended December 31, 2024, what was the highest amount Big Blue Swim School was charged for payroll and various costs by its Parent?

Accepted Answer

which is included in ''Due to affiliate'' in the accompanying balance sheets.

The Company is also charged an allocation of insurance and payroll costs for certain employees, as well as other various fees paid by the Parent. The Company was charged \$3,484,804, \$4,393,134 and \$2,971,397 in each of the years in the three-year period ended December 31, 2024, respectively, for such payroll and various costs, in which the Parent is not requesting repayment by the Company.

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 75)

Question 36

After the term of the franchise agreement, for how long must a Big Blue Swim School franchisee keep Confidential Information confidential?

Accepted Answer

You will not acquire any interest in any Confidential Information, other than the right to use certain Confidential Information as we specify in operating the School during the Term according to Brand Standards and this Agreement's other terms and conditions. Using any Confidential Information in another business would constitute an unfair method of competition with us and our affiliates, suppliers, and franchisees. You acknowledge and agree that Confidential Information is proprietary, includes our and our affiliates' trade secrets, and is disclosed to you only on the condition that you, your owners, and your employees agree, and you and they do agree:

- (1) not to use any Confidential Information in another business or capacity and at all times to keep Confidential Information absolutely confidential, both during and after the Term (afterward for as long as the information is not generally known in the swim lesson industry);

Source: Item 22 — CONTRACTS (FDD pages 75–76)

Question 37

Is the 14-month deadline for opening a Big Blue Swim School subject to potential extensions?

Accepted Answer

Within two hundred ten (210) days after the Effective Date, but subject to the potential extensions described below in Section 4.C, an acceptable site for the School within the exclusive geographical area described in Exhibit A (the "**Site Selection Area**") must be found and secured.

The timeframe during which the School's site must be located, accepted, and secured within the Site Selection Area (the "**Site Selection Period**") will expire upon the earliest of (a) our acceptance of the School's site and Lease and giving you an amended and restated Exhibit A, (b) this Agreement's termination, or (c) two hundred ten (210) days after the Effective Date.

- 4.B.2 We may (but have no obligation to) visit the Site Selection Area to review potential School sites.

Using local commercial real estate brokers, we may recommend potential School sites for your consideration.

Recommendation of a School's site will be based on our then-current criteria for BIG BLUE Swim School sites, including, without limitation, population density and other demographic characteristics, visibility, traffic flow, competition, accessibility, ingress and egress, size, and other physical and commercial characteristics.

- 4.B.3 We will not unreasonably withhold our acceptance of a site if, in our experience and based on the factors outlined above, the proposed site is not inconsistent with sites that we regard as favorable or that otherwise have been successful sites in the past for BIG BLUE Swim Schools.

However, we have the absolute right to reject any site not meeting our criteria or to require you to acknowledge in writing that a site you prefer is accepted but not recommended due to its incompatibility with certain factors that bear on a site's suitability as a location for a BIG BLUE Swim School.

- 4.B.4 You must evaluate and ultimately approve the selection of the School's site.

Our recommendation and acceptance of a site indicates only that we believe the site is not inconsistent with sites that we regard as favorable or that otherwise have been successful sites in the past for BIG BLUE Swim Schools.

Applying criteria appearing effective with other sites might not accurately reflect the potential of all sites, and demographic or other factors included in or excluded from our criteria could change, altering a site's potential.

Source: Item 22 — CONTRACTS (FDD pages 75–76)

Question 38

According to the California Rider, until what event will Big Blue Swim School defer the franchisee's payment of the initial franchise fee?

Accepted Answer

Despite the payment provisions above, we will defer your payment of the initial franchise fee until we have fulfilled all our initial obligations to you under this Agreement and you have commenced doing business. You must pay us the initial franchise fee on the day you open the BIG BLUE Swim School for business.

Source: Item 23 — RECEIPTS (FDD pages 76–278)

Question 39

According to the Big Blue Swim School FDD, is the franchisee obligated to incur higher operating costs if the franchisor modifies Brand Standards?

Accepted Answer

In addition to your obligations described above in clauses (1) through (3), we periodically may modify Brand Standards, which may accommodate regional or local variations, and those modifications may obligate you to invest additional capital in the School and/or incur higher operating costs. You agree to implement any changes in mandatory Brand Standards within the time period we request as if they were part of this Agreement on the Effective Date. However, except for:

- (a) changes in the Computer System;
- (b) changes in signage and logo (i.e., School exterior and interior graphics);
- (c) changes provided in Sections 17.C(f) and (h) in connection with a transfer;
- (d) changes required by the Lease or applicable Law; and
- (e) your obligations in clauses (1) through (3) in the first paragraph of this Section 7.A,

for all of which the timing and amounts are not limited during the Term, we will not obligate you to make any capital modifications:

Source: Item 22 — CONTRACTS (FDD pages 75–76)

Question 40

According to the Big Blue Swim School FDD, is the franchisee obligated to invest additional capital in the School if the franchisor modifies Brand Standards?

Accepted Answer

In addition to your obligations described above in clauses (1) through (3), we periodically may modify Brand Standards, which may accommodate regional or local variations, and those modifications may obligate you to invest additional capital in the School and/or incur higher operating costs. You agree to implement any changes in mandatory Brand Standards within the time period we request as if they were part of this Agreement on the Effective Date. However, except for:

- (a) changes in the Computer System;
- (b) changes in signage and logo (i.e., School exterior and interior graphics);
- (c) changes provided in Sections 17.C(f) and (h) in connection with a transfer;
- (d) changes required by the Lease or applicable Law; and
- (e) your obligations in clauses (1) through (3) in the first paragraph of this Section 7.A,

for all of which the timing and amounts are not limited during the Term, we will not obligate you to make any capital modifications:

- (i) i. during the first three (3) years after the School commences operation; or
- (ii) ii. during the last two (2) years of the Term, unless the proposed capital modifications during those last two (2) years (the amounts for which are not limited) are in connection with School upgrades, remodeling, refurbishing, and similar activities for your acquisition of a successor franchise (as provided in Section 18(4)).

This means that, besides the rights we reserve above in clauses (a) through (e), we may during the fourth (4th) through eighth (8th) years after the School commences operation (and unrelated to your potential acquisition of a successor franchise) require you substantially to alter the School's appearance, layout, and/or design, and/or replace a material portion of the Operating Assets, in order to meet our then-current requirements and then-current Brand Standards for new BIG BLUE Swim Schools. This could obligate you to make extensive structural changes to, and significantly remodel and renovate, the School, and/or to spend substantial amounts for new Operating Assets. You agree to spend any sums required in order to comply with this obligation and our requirements (even if such expenditures cannot be amortized over the remaining Term), provided, however, that we will not require you to spend in the aggregate in connection with any remodeling and renovation project, during the fourth (4th) through eighth (8th) years after the School commences operation, more than twenty-percent (20%) of the initial amount you spent to construct the School. Within sixty (60) days after receiving written notice from us, you must prepare plans according to the standards and specifications we prescribe, using architects and contractors we designate or approve, and you must submit those plans to us for written approval. You agree to complete all work according to the plans we approve within the time period we reasonably specify and in accordance with this Agreement.

Source: Item 22 — CONTRACTS (FDD pages 75–76)

Question 41

According to the Big Blue Swim School FDD, how do the terms of the software license agreement relate to the terms in the Franchise Agreement if there is a conflict?

Accepted Answer

- (c) Any incongruities or conflicts, whether in fact or by operation of law, between the terms of this License and the Franchise Agreements shall be construed in the light most favorable to Licensor and in such a manner as to effectuate the intent of Licensor hereunder and the provisions of the Franchise Agreements. In the case of an unresolvable conflict between the License and the Franchise Agreements, the terms of the Franchise Agreements shall supersede and apply herein.

Source: Item 23 — RECEIPTS (FDD pages 76–278)

Question 42

According to the Big Blue Swim School franchise agreement, what happens if I fail to pay amounts owed to Big Blue Swim School or its affiliates?

Accepted Answer

Neither we nor you will be liable for loss or damage or be in breach of this Agreement if our or your failure to perform obligations results from: (1) acts of God; (2) fires, strikes, embargoes, war, terrorist acts or similar events, or riot; (3) compliance with the orders, requests, or regulations of any federal, state, or municipal government; or (4) any other similar event or cause. Any delay resulting from these causes will extend performance accordingly or excuse performance, in whole or in part, as may be reasonable. However, these causes will not excuse payment of amounts owed at the time of the occurrence or payment of Royalties, Software License Fees, Brand Fund contributions, MSC Fees, and other amounts due afterward. Under no circumstances do any financing delays, difficulties, or shortages excuse your failure to perform or delay in performing your obligations under this Agreement.

Source: Item 22 — CONTRACTS (FDD pages 75–76)

Question 43

According to the Big Blue Swim School franchise agreement, what happens if I fail to sign a separate franchise agreement (or cause my Approved Affiliate to sign) within the specified timeframe?

Accepted Answer

|  | , you agree within the time period we |
|---|---|
| specify (but no later than the deadline on the Schedule) to sign (or cause your Approved Affiliate |  |
| to sign) a separate franchise agreement (and related documents) for that | BIG BLUE Swim School. |
| If you (or your Approved Affiliate) fail to do so, or cannot obtain lawful possession of the proposed |  |
| site, we have the right to withdraw our acceptance of the proposed site and exercise any of our |  |
| other rights under this DRA. |  |

Source: Item 23 — RECEIPTS (FDD pages 76–278)

Question 44

According to the Rider to the Big Blue Swim School Franchise Agreement for use in Maryland, can a franchisee bring an action in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law, and under what condition?

Accepted Answer

6. **CONSENT TO JURISDICTION**. The following language is added at the end of Section 22.H. of the Franchise Agreement:

Agreement.

Notwithstanding the foregoing, and subject to your arbitration obligations, you may bring an action in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law.

7. **LIMITATION OF CLAIMS**. The following language is added to the end of Section 22.L. of the Franchise Agreement:

, except that any and all claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within three (3) years after the grant of the Franchise.

Source: Item 23 — RECEIPTS (FDD pages 76–278)

Question 45

According to the Rider to the Big Blue Swim School Franchise Agreement for use in Maryland, when are the initial fees and payments owed by the franchisee deferred?

Accepted Answer

Despite the payment provisions above, we will defer your payment of the initial franchise fee until we have fulfilled all our initial obligations to you under this Agreement and you have commenced doing business. You must pay us the initial franchise fee on the day you open the BIG BLUE Swim School for business.

Source: Item 23 — RECEIPTS (FDD pages 76–278)

Question 46

According to the Rider to the Big Blue Swim School Franchise Agreement for use in Maryland, what law applies to claims arising under the Maryland Franchise Registration and Disclosure Law?

Accepted Answer

5. **GOVERNING LAW**. The following language is added at the end of Section 22.G. of the Franchise Agreement:

required a financial assurance. Therefore, all initial fees and payments owed by you will be deferred until we complete our pre-opening obligations under this

However, to the extent required by applicable law, Maryland law will apply to claims arising under the Maryland Franchise Registration and Disclosure Law.

6. **CONSENT TO JURISDICTION**. The following language is added at the end of Section 22.H. of the Franchise Agreement:

Agreement.

Notwithstanding the foregoing, and subject to your arbitration obligations, you may bring an action in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law.

7. **LIMITATION OF CLAIMS**. The following language is added to the end of Section 22.L. of the Franchise Agreement:

, except that any and all claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within three (3) years after the grant of the Franchise.

Source: Item 23 — RECEIPTS (FDD pages 76–278)

Question 47

According to the Rider, what happens if a Big Blue Swim School franchisee (or their Approved Affiliate) fails to sign a franchise agreement within the specified timeframe after site acceptance?

Accepted Answer

|  | , you agree within the time period we |
|---|---|
| specify (but no later than the deadline on the Schedule) to sign (or cause your Approved Affiliate |  |
| to sign) a separate franchise agreement (and related documents) for that | BIG BLUE Swim School.
| If you (or your Approved Affiliate) fail to do so, or cannot obtain lawful possession of the proposed |  |
| site, we have the right to withdraw our acceptance of the proposed site and exercise any of our |  |
| other rights under this DRA. |  |

Source: Item 23 — RECEIPTS (FDD pages 76–278)

Question 48

According to this rider, what are the reasons for signing this rider related to the Big Blue Swim School franchise?

Accepted Answer

riod a Franchise Disclosure Document (offering prospectus) must be provided to a prospective franchisee before a sale may be made. New York law requires a franchisor to provide the Franchise Disclosure Document at the earliest of the first personal meeting or ten (10) business days before the execution of the franchise or other agreement or the payment of any consideration that relates to the franchise relationship.

**THE FOLLOWING PAGES IN THIS EXHIBIT ARE STATE-SPECIFIC RIDERS TO THE FRANCHISE AGREEMENT**

## **RIDER TO THE BIG BLUE SWIM SCHOOL FRANCHISING, LLC FRANCHISE AGREEMENT FOR USE IN CALIFORNIA**

| THIS RIDER is made by and between BIG BLUE SWIM SCHOOL FRANCHISING,                                                                                                                                                                                                                               |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| LLC, an Illinois limited liability company whose principal business address is 112 Krog Street                                                                                                                                                                                                    |
| NE, Suite D-135, Atlanta, Georgia 30307 ("we," "us," or "our"), and,                                                                                                                                                                                                                              |
| a(n) ("you" or "your").                                                                                                                                                                                                                                                                           |
| 1. |
| BACKGROUND. We and you are parties to that certain Franchise Agreement |
| dated (the "Franchise Agreement"). This Rider is annexed to and |
| forms part of the Franchise Agreement. This Rider is being signed because (a) the offer or sale of |
| the franchise for the BIG BLUE Swim School you will operate under the Franchise Agreement |
| was made in the State of California and you are a California resident, and/or (b) the BIG BLUE |
| Swim School will operate in California.                                                                                                                                                                                                                                                           |
| 2. |
| FEES. The following language is added to the end of Section 5.A. of the Franchise |
| Agreement: |

Despite the payment provisions above, we will defer your payment of the initial franchise fee until we have fulfilled all our initial obligations to you under this Agreement and you have commenced doing business. You must pay us the initial franchise fee on the day you open the BIG BLUE Swim School for business.

3. The following language is added to the end of the Franchise Agreement:

For franchisees operating outlets located in California, the California Franchise Investment Law and the California Franchise Relations Act will apply regardless of the choice of law or dispute resolution venue stated elsewhere. Any language in the Franchise Agreement or any amendment thereto or any agreement to the contrary is superseded by this condition.

The Franchise Agreement contains a covenant not to compete which extends beyond the termination of the franchise. A contract that restrains a former franchisee from engaging in a lawful trade or business is to that extent void under California Business and Professions Code Section 16600.

No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise

**IN WITNESS WHEREOF**, the parties have executed and delivered this Rider, to be effective as of the date set forth next to our signature below.

| Year ending December 31: |  | Amount |
|---|---|---|
| 2025 | $ | 83,277 |
## **RIDER TO THE BIG BLUE SWIM SCHOOL FRANCHISING, LLC FRANCHISE AGREEMENT FOR USE IN ILLINOIS**

| Thereafter | 2,018,346 |
|---|---|
| Total | $2,431,072 |
3.

Source: Item 23 — RECEIPTS (FDD pages 76–278)

Question 49

Can the arbitrator or mediator decide the location of arbitration or mediation for a Big Blue Swim School franchise in Washington?

Accepted Answer

If the Big Blue Swim School is located in Washington or you are a resident of Washington, the following shall apply:

This General Release does not apply with respect to claims arising under the Washington Franchise Investment Protection Act, RCW 19.100, and the rules adopted thereunder.

Source: Item 23 — RECEIPTS (FDD pages 76–278)

Question 50

Is Big Blue Swim School authorized to supplement the information provided in Item 19 with information about possible performance at a particular location?

Accepted Answer

The FTC's Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the disclosure document. Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) a franchisor supplements the information provided in this Item 19, for example, by providing information about possible performance at a particular location or under particular circumstances.

We do not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets. We also do not authorize

our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report it to the franchisor's management by contacting Big Blue Swim School Franchising, LLC, Attn: Tyson Fraser, 112 Krog Street NE Suite D-135 Atlanta, Georgia 30307, (773) 701-8081, the Federal Trade Commission, and the appropriate state regulatory agencies.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 69–70)

Question 51

What is Big Blue IP's intention regarding the renewal of registered marks for Big Blue Swim School?

Accepted Answer

Big Blue IP has filed, or will file when due, all required affidavits for its registered Marks. While no Marks are due for renewal, Big Blue IP intends to renew them if they remain important to the BIG BLUE Swim School brand. Big Blue IP licenses us to use these Marks and related intellectual property, and to authorize franchisees to use them in operating BIG BLUE Swim Schools, under a Trademark, Copyright, and Know-How License Agreement effective August 28, 2018 (the "License Agreement"). The License Agreement's initial term is 20 years; we have the right to renew the License Agreement for 3 successive 10-year terms. We have the right to terminate the License Agreement at any time. Big Blue IP may terminate the License Agreement immediately if we breach the License Agreement and fail to cure the breach within 30 days after receiving written notice from Big Blue IP. When the License Agreement terminates or expires, we must stop using and sublicensing the Marks and related intellectual property. However, any BIG BLUE Swim School franchisee that has been authorized to use the Marks in its franchise may continue using the Marks until that franchisee's franchise agreement, and any permitted successor franchise agreement, expire or are terminated, but only if the franchisee continues to comply with its obligations in the franchise agreement and any permitted successor franchise agreement during their remaining terms. No other agreement limits our right to use or sublicense any Mark (whether we own them or Big Blue IP licenses them for use in operating BIG BLUE Swim Schools).

Source: Item 13 — TRADEMARKS (FDD pages 55–58)

Question 52

Does the California Rider for Big Blue Swim School supersede any conflicting terms in the Franchise Agreement?

Accepted Answer

For franchisees operating outlets located in California, the California Franchise Investment Law and the California Franchise Relations Act will apply regardless of the choice of law or dispute resolution venue stated elsewhere. Any language in the Franchise Agreement or any amendment thereto or any agreement to the contrary is superseded by this condition.

The Franchise Agreement contains a covenant not to compete which extends beyond the termination of the franchise. A contract that restrains a former franchisee from engaging in a lawful trade or business is to that extent void under California Business and Professions Code Section 16600.

No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise

Source: Item 23 — RECEIPTS (FDD pages 76–278)

Question 53

What condition must be met before the initial franchise fee is due for a Big Blue Swim School franchise?

Accepted Answer

Despite the payment provisions above, we will defer your payment of the initial franchise fee due to us under the Franchise Agreement until we have fulfilled all our initial obligations to you under the Franchise Agreement and you have commenced operating the BIG BLUE Swim School. You must pay us the initial franchise fee on the day you begin operating your BIG BLUE Swim School.

Despite the payment provisions above, we will defer your payment of the development fee due to us under a Development Rights Agreement until we have fulfilled all our initial obligations to you and you have commenced operating your first BIG BLUE Swim School. You must pay us the development fee due under a Development Rights Agreement on the day you begin operating your first BIG BLUE Swim School.

Source: Item 23 — RECEIPTS (FDD pages 76–278)

Question 54

What conditions must a Big Blue Swim School franchisee meet to ensure that the franchisor will not establish or grant others the right to establish Big Blue Swim Schools within the Territory during the DRA's term?

Accepted Answer

you want the right to construct, develop, and operate multiple BIG BLUE Swim Schools within the Territory over a certain time period (besides the BIG BLUE Swim School covered by the First Franchise Agreement), and we are willing to grant you those development rights if you comply with the terms of this DRA.

**Now, therefore**, in consideration of the mutual covenants, agreements, and obligations set forth in this DRA, we and you agree as follows:

#### 1. **Grant of Development Rights**.

- (a) Subject to your strict compliance with this DRA, we grant you the right (directly or through your Approved Affiliates) to construct, develop, and operate \_\_\_\_\_\_\_ (\_\_\_) new BIG BLUE Swim Schools (including the BIG BLUE Swim School covered by the First Franchise Agreement), according to the mandatory development schedule described in Exhibit A to this DRA (the "**Schedule**"), within the distinct geographic areas narratively described and/or pictorially identified in Exhibit B (such geographic areas, collectively, the "**Territory**").
- (b) If you (and your Approved Affiliates, as applicable) are fully complying with all of your (and their) obligations under this DRA, the First Franchise Agreement, and all other franchise agreements then in effect between us and you (and your Approved Affiliates, as applicable) for the construction, development, and operation of BIG BLUE Swim Schools, then during this DRA's term only, we (and our affiliates) will not establish and operate, or grant to others the right to establish and operate, BIG BLUE Swim Schools operating the Swim School Concept that have their physical locations within the Territory. However, for the avoidance of all doubt, you acknowledge that we (and our affiliates) reserve the rights described in Section 8 of this DRA.
- (c) The location exclusivity described in clause (b) above (subject to this DRA's terms, including Section 8) is the only restriction on our (and our affiliates') activities within the Territory during this DRA's term.

Source: Item 23 — RECEIPTS (FDD pages 76–278)

Question 55

What conditions must be met to ensure that Big Blue Swim School will not establish or grant others the right to establish Big Blue Swim Schools within the Territory during the DRA's term?

Accepted Answer

your Approved Affiliates) to construct, develop, and operate \_\_\_\_\_\_\_ (\_\_\_) new BIG BLUE Swim Schools (including the BIG BLUE Swim School covered by the First Franchise Agreement), according to the mandatory development schedule described in Exhibit A to this DRA (the "**Schedule**"), within the distinct geographic areas narratively described and/or pictorially identified in Exhibit B (such geographic areas, collectively, the "**Territory**").
- (b) If you (and your Approved Affiliates, as applicable) are fully complying with all of your (and their) obligations under this DRA, the First Franchise Agreement, and all other franchise agreements then in effect between us and you (and your Approved Affiliates, as applicable) for the construction, development, and operation of BIG BLUE Swim Schools, then during this DRA's term only, we (and our affiliates) will not establish and operate, or grant to others the right to establish and operate, BIG BLUE Swim Schools operating the Swim School Concept that have their physical locations within the Territory. However, for the avoidance of all doubt, you acknowledge that we (and our affiliates) reserve the rights described in Section 8 of this DRA.
- (c) The location exclusivity described in clause (b) above (subject to this DRA's terms, including Section 8) is the only restriction on our (and our affiliates') activities within the Territory during this DRA's term.

Source: Item 23 — RECEIPTS (FDD pages 76–278)

Question 56

What are the conditions that must be met before a Big Blue Swim School can open for business, regardless of the contractual deadline?

Accepted Answer

Despite the 21-month contractual opening deadline, you may not open the School for business until: (1) we or our designee approves the School in writing; (2) your Managing Owner, general managers, and assistant managers complete to our satisfaction the initial orientation and training programs; (3) the School has sufficient trained employees to manage and operate the School on a day-to-day basis in compliance with our Brand Standards; (4) the School's employees complete all required third-party certifications for the School's lawful operation; (5) you have satisfied all state and federal permitting, licensing, and other legal requirements, have obtained all required insurance coverage, and sent us copies of any materials we request; and (6) you have paid all amounts owed to, and are not in default under any agreement with, us, our affiliates, and principal suppliers. (Franchise Agreement—Sections 4.D and 4.E)

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 37–51)

Question 57

What is the consequence of not complying strictly with the development obligations provided in the schedule for Big Blue Swim School?

Accepted Answer

YOU ACKNOWLEDGE AND AGREE THAT TIME IS OF THE ESSENCE UNDER THIS DRA, AND YOUR RIGHTS UNDER THIS DRA ARE SUBJECT TO TERMINATION (WITHOUT ANY CURE OPPORTUNITY) IF YOU DO NOT COMPLY STRICTLY WITH THE DEVELOPMENT OBLIGATIONS PROVIDED IN THE SCHEDULE. WE MAY ENFORCE THIS DRA STRICTLY.

Source: Item 23 — RECEIPTS (FDD pages 76–278)

Question 58

What is the consequence if a franchisee signs a lease or sublease for a Big Blue Swim School site without Big Blue Swim School's written acceptance?

Accepted Answer

- (d) You also must send us for our written acceptance, which we will not unreasonably withhold, any lease or sublease that will govern your occupancy and lawful possession of each BIG BLUE Swim School site before you sign it. You may not sign any lease or sublease that we
have not accepted in writing. We may (but have no obligation to) guide you in the leasing process but will not negotiate the lease or sublease for you or provide any legal advice. You must satisfy the lease execution deadline specified in the Schedule for each BIG BLUE Swim School you commit to develop under this DRA.

Source: Item 23 — RECEIPTS (FDD pages 76–278)

Question 59

When are Cooperative Contributions due for a Big Blue Swim School franchise?

Accepted Answer

| Column 1 | Column 2 | Column 3 | Column 4 |
|---|---|---|---|
| Cooperative Contributions(5) | An amount we specify up to 4% of School’s Gross Revenue(3) during each Calculation Period(4) | As specified | We have not yet formed any Cooperatives and do not yet require Cooperative contributions. Footnotes 5 and 6 below describe your local advertising obligations. |

Source: Item 6 — OTHER FEES (FDD pages 13–25)

Question 60

Can Big Blue Swim School decide not to complete the purchase of a franchise after the purchase price is determined?

Accepted Answer

- (j) we have determined that the purchase price, payment terms, and required financing will not adversely affect the transferee's operation of the School;

Source: Item 22 — CONTRACTS (FDD pages 75–76)

Question 61

What is the dependency between compliance with the Franchise Agreement and eligibility for a Big Blue Swim School successor franchise?

Accepted Answer

When this Agreement expires (unless it is terminated sooner), you will have the right to acquire a successor franchise to continue operating the School as a BIG BLUE Swim School for ten (10) years under our then-current form of franchise agreement, but only if you:

- (1) have requested in writing and conducted with us a business review at least six (6) months, but not more than nine (9) months, before the end of the Term and then have formally notified us of your desire to acquire a successor franchise no less than three (3) months before the end of the Term;
- (2) have substantially complied with all of your obligations under this Agreement and all other agreements with us or our affiliates related to the School, including operated the School in substantial compliance with Brand Standards, during the Term, as noted in the business review we conduct;
- (3) continue complying substantially with all of your obligations under this Agreement and all other agreements with us or our affiliates related to the School between the time you formally notify us of your desire to acquire a successor franchise and the end of the Term; and
- (4) retain the right to occupy the School at its original site, have remodeled and upgraded the School, and otherwise have brought the School into full compliance with then-applicable specifications and standards for new BIG BLUE Swim Schools (regardless of cost) before this Agreement expires. We have no obligation to grant you a successor franchise if you wish to relocate the School or no longer have the right to occupy the School at its original site.

Source: Item 22 — CONTRACTS (FDD pages 75–76)

Question 62

What is the dependency between insurance proceeds and royalty payments for a Big Blue Swim School that is closed due to a casualty?

Accepted Answer

The Term will be extended for the time period during which the School is closed due to fire or other casualty. You need not pay Royalties or Brand Fund contributions while the School is closed due to condemnation or casualty unless you receive insurance proceeds compensating you for lost Gross Revenue during such time period.

Source: Item 22 — CONTRACTS (FDD pages 75–76)

Question 63

What is the dependency for Big Blue Swim School to refund the pro rata portion of the Development Fee?

Accepted Answer

- (c) Our or another franchisee's construction, development, and operation of a BIG BLUE Swim School within the Carved-Out Area, as permitted by the Qualified Site Lease Rights, will not count toward your compliance with the Schedule. However, each time the Qualified Site Lease Rights are exercised, you may elect to develop one less BIG BLUE Swim School in the Territory (based on the number of BIG BLUE Swim Schools remaining to be constructed and developed under the Schedule). You must notify us of that election within thirty (30) days after we deliver notice to you under clause (b) above, in which case the then-final BIG BLUE Swim School appearing on the Schedule will be deemed to be removed from the Schedule without further action. Within thirty (30) days after you notify us of that election, we will refund to you the pro rata portion of the Development Fee allocable to the BIG BLUE Swim School that is the subject of the Qualified Site Lease Rights.

Source: Item 23 — RECEIPTS (FDD pages 76–278)

Question 64

What is the dependency related to the destruction of materials containing any Mark for a Big Blue Swim School franchisee?

Accepted Answer

- (3) if we do not exercise the option under Section 20.G below, you must at your own cost, and without any payment from us for such items, destroy all signs, Marketing Materials, forms, and other materials containing any Mark within twenty (20) days after the De-identification Date (defined below). If you fail to do so voluntarily, we and our representatives may enter the School at our convenience and remove these items without liability to you, the landlord, or any other third party for trespass or any other claim. You must reimburse our costs of doing so. (Notwithstanding the above, you may after the Deidentification Date sell these branded items to another BIG BLUE Swim School franchisee.);

Source: Item 22 — CONTRACTS (FDD pages 75–76)

Big_Blue_Swim_School 2025 FDD FAQ