What is the definition of 'Owner' in the Big Blue Swim School franchise agreement?
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)
Based on the 2025 Franchise Disclosure Document, the provided excerpts do not contain a specific definition of the term 'Owner' within the Big Blue Swim School franchise agreement. However, the document does outline certain restrictions and obligations pertaining to owners, indicating that the term encompasses individuals with a direct or indirect controlling interest in a competitive business.
Specifically, the franchise agreement prohibits owners from having a controlling interest in a Competitive Business, performing services for a Competitive Business, loaning money to a Competitive Business, diverting business from the Big Blue Swim School to a Competitive Business, or soliciting other franchisees for commercial purposes. A 'Competitive Business' is 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, excluding other Big Blue Swim School franchises.
Given the absence of a precise definition, prospective Big Blue Swim School franchisees should seek clarification from the franchisor regarding the specific criteria used to determine who qualifies as an 'owner' under the franchise agreement. Understanding this definition is crucial, as it dictates the scope of restrictions and obligations that apply to individuals involved in the franchise, particularly concerning competitive activities. Franchisees should also inquire about any potential implications for ownership transfers or changes in ownership structure.