What is the 'Carved-Out Area' that Big Blue Swim School can exclude from the Territory definition?
Big_Blue_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
If we exercise the Qualified Site Lease Rights (directly or through another franchisee), we have the unilateral right to amend immediately the definition and scope of the Territory in order to carve out and exclude from the definition and scope of the Territory both (i) the BIG BLUE Swim School site that is the subject of the Qualified Site Lease Rights and (ii) an area of protection around that site the size and description of which will be consistent with the size and description of areas of protection that we customarily have granted or would grant to a franchisee developing a BIG BLUE Swim School in a similar market area (see the discussion about Areas of Protection in the "Franchise Agreement" subitem above). (The site and area of protection referenced in clauses (i) and (ii) are, together, the "Carved-Out Area.") Our amendment of the Territory definition and scope will be effective upon our delivery of written notice to you. Your Territory definition otherwise will not be altered. After we deliver written notice to you, you no longer will have any BIG BLUE Swim School development rights in the Carved-Out Area.
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 development 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 development schedule). You must notify us of that election within 30 days after we deliver notice to you, in which case the then-final BIG BLUE Swim School appearing on the development schedule will be deemed to be removed from the schedule without further action. Within 30 days after you notify us of that election, we will refund to you the prorata portion of the development fee allocable to the School that is the subject of the Qualified Site Lease Rights.
Source: Item 12 — TERRITORY (FDD pages 51–55)
What This Means (2025 FDD)
According to Big Blue Swim School's 2025 Franchise Disclosure Document, the 'Carved-Out Area' refers to a specific area that Big Blue Swim School can exclude from a franchisee's territory under certain conditions. This occurs when Big Blue Swim School exercises its Qualified Site Lease Rights, either directly or through another franchisee. The Carved-Out Area consists of two parts: the specific Big Blue Swim School site that is the subject of the Qualified Site Lease Rights, and an area of protection around that site. The size and description of this area of protection will align with what Big Blue Swim School typically grants to franchisees developing a Big Blue Swim School in similar market areas.
In practical terms, if Big Blue Swim School exercises these rights, they can amend the franchisee's territory to exclude the Carved-Out Area. This amendment becomes effective once the franchisee receives written notice. After this notice, the franchisee no longer has development rights for Big Blue Swim Schools within the Carved-Out Area.
The construction, development, and operation of a Big Blue Swim School within the Carved-Out Area by Big Blue Swim School or another franchisee will not count against the original franchisee's development schedule. However, the franchisee has the option to reduce the number of Big Blue Swim Schools they are obligated to develop in their territory by one for each instance of Big Blue Swim School exercising its Qualified Site Lease Rights. To exercise this option, the franchisee must notify Big Blue Swim School within 30 days of receiving notice about the Carved-Out Area. If the franchisee chooses this option, Big Blue Swim School will refund a prorated portion of the development fee associated with the removed school within 30 days of the notification.