What business or advertising practices are Big Blue Swim School franchisees prohibited from engaging in?
Big_Blue_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
- (1) have any direct or indirect, controlling or non-controlling interest as an owner—whether of record, beneficial, or otherwise—in a Competitive Business (defined below), wherever located or operating, provided that this restriction will 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;
- (2) perform services as a director, officer, manager, employee, consultant, representative, or agent for a Competitive Business, wherever located or operating;
- (3) directly or indirectly loan any money or other thing of value, or guarantee any other person's loan, to any Competitive Business or any owner, director, officer, manager, or employee of any Competitive Business, wherever located or operating;
- (4) divert or attempt to divert any actual or potential business or customer of the School to a Competitive Business; or
- (5) solicit other franchisees, or use available lists of franchisees, for any commercial purpose other than purposes directly related to the School's operation.
The term "Competitive Business," as used in this Agreement, means any (a) business that provides swim lessons, swim skills, or swim activities for children ranging in age from three (3) months to twelve (12) years old, or (b) business granting franchises or licenses to others to operate the type of business described in clause (a), other than a BIG BLUE Swim School operated under a franchise agreement with us.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 Big Blue Swim School FDD, franchisees face several restrictions regarding business and advertising practices. Specifically, franchisees are restricted from having any ownership interest in a competitive business, defined as any business that provides swim lessons, swim skills, or swim activities for children aged three months to twelve years, or any business that franchises or licenses others to operate such a business. However, owning less than 3% of a publicly-traded class of securities is permitted.
Big Blue Swim School franchisees are also prohibited from acting as a director, officer, manager, employee, consultant, representative, or agent for a Competitive Business. They cannot provide loans or guarantees to any Competitive Business or its owners, directors, officers, managers, or employees. Franchisees are not allowed to divert or attempt to divert any actual or potential business or customer of the Big Blue Swim School to a Competitive Business.
Furthermore, franchisees are restricted from soliciting other franchisees or using available lists of franchisees for any commercial purpose unrelated to the operation of the Big Blue Swim School. These restrictions are designed to protect the Big Blue Swim School brand and maintain the integrity of its franchise system by preventing conflicts of interest and ensuring that franchisees focus their efforts on promoting and operating their Big Blue Swim School location.