What is deferred regarding the initial franchise fee for a Big Blue Swim School franchise?
Big_Blue_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
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)
What This Means (2025 FDD)
According to the 2025 Big Blue Swim School Franchise Disclosure Document, the payment of the initial franchise fee is deferred until Big Blue Swim School has fulfilled all of its initial obligations to the franchisee under the Franchise Agreement, and the franchisee has commenced operating their Big Blue Swim School. The franchisee must pay the initial franchise fee on the day they begin operating their Big Blue Swim School. This deferral also applies to the development fee under a Development Rights Agreement, where payment is deferred until Big Blue Swim School has fulfilled its obligations and the franchisee has commenced operating their first Big Blue Swim School. The development fee must be paid on the day the franchisee begins operating their first Big Blue Swim School.
This deferral of the initial franchise fee and development fee is a significant benefit for prospective Big Blue Swim School franchisees. It allows them to conserve capital during the initial setup phase, as they do not have to pay these fees until they are ready to open their swim school. This can help franchisees manage their cash flow and reduce the financial risk associated with starting a new business. The deferral is contingent upon Big Blue Swim School fulfilling its initial obligations, which provides an incentive for the franchisor to provide the necessary support and training to help the franchisee get their business up and running.
It's important to note that while the initial franchise fee is deferred, it is still due in full on the day the Big Blue Swim School opens for business. Franchisees should plan accordingly to ensure they have sufficient funds available to make this payment. Additionally, the FDD mentions that a portion of the Development Fee can be applied toward the initial franchise fee for subsequent swim schools developed within the territory, which could further ease the financial burden of expansion. Prospective franchisees should carefully review the terms of the Franchise Agreement and Development Rights Agreement to fully understand the payment obligations and deferral conditions.