What constitutes a 'transfer' of a Big Blue Swim School franchise, as defined on page 40?
Big_Blue_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
If the proposed transfer involves the franchise rights granted by this Agreement or a controlling ownership interest in you or in an Entity owning a controlling ownership interest in you, or is one of a series of transfers (regardless of the timeframe over which those transfers take place) in the aggregate transferring the franchise rights granted by this Agreement or a controlling ownership interest in you or in an Entity owning a controlling ownership interest in you, then we will not unreasonably withhold our approval of a proposed transfer meeting all of the following conditions (provided, however, there may be no such transfer until after the School has opened for business):
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
The 2025 Big Blue Swim School Franchise Disclosure Document (FDD) outlines specific conditions and definitions related to the transfer of a franchise. According to Item 17.B, a transfer can involve either the franchise rights granted by the agreement or a controlling ownership interest in the franchisee or an entity owning a controlling interest. This definition also includes a series of transfers that, in aggregate, result in the transfer of franchise rights or a controlling ownership interest.
For a prospective franchisee, this means that any change in ownership, whether a direct transfer of the franchise agreement or a change in the controlling ownership of the business, is considered a transfer under the terms of the agreement. This is a critical point because Big Blue Swim School has specific requirements and conditions that must be met for any transfer to be approved. These conditions are detailed in Section 17.C of the FDD.
Specifically, if the transfer involves franchise rights or a controlling ownership interest, Big Blue Swim School will assess several factors. These include the transferee's moral character, whether they have any conflicting business interests (such as involvement with a competitive business), and whether they meet the standards for new franchisees. Additionally, the transferee must sign a Guaranty and Assumption of Obligations and pay a $5,000 transfer fee for a non-controlling ownership interest transfer. For transfers involving franchise rights or a controlling interest, the franchisor's approval will not be unreasonably withheld if certain conditions are met, such as compliance with the agreement and the opening of the school for business.