What was the amount of revenue recognized during the year for Big Blue Swim School in 2023?
Big_Blue_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
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 '
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 75)
What This Means (2025 FDD)
According to Big Blue Swim School's 2025 Franchise Disclosure Document, revenues from related-party franchises amounted to $1,471,387 for the year ended December 31, 2023. These revenues are included in the overall "Revenues" reported in the statements of operations and member's deficit. A related party is defined as an affiliated entity through common ownership.
This indicates that a significant portion of Big Blue Swim School's revenue in 2023 came from transactions with entities under common ownership. This is a common practice, especially in early-stage franchise systems, as the franchisor may operate some locations themselves or have close relationships with early franchisees.
For a prospective franchisee, this information highlights the importance of understanding the nature and extent of related-party transactions. While such transactions are not inherently problematic, it is crucial to evaluate whether they are conducted on terms that are fair and beneficial to all parties involved, including franchisees. It would be prudent for potential franchisees to inquire about the specific details of these related-party transactions and their potential impact on the overall financial performance of Big Blue Swim School.