When is the Development Fee fully earned by Big Blue Swim School?
Big_Blue_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
The Development Fee is:
- (a) consideration for the rights we grant you in this DRA and for reserving the Territory for you to the exclusion of others (subject to our rights in Section 8) while you are in compliance with this DRA;
- (b) fully earned by us when we and you sign this DRA; and
- (c) not refundable under any circumstances (except as provided in Section 8(c) below), even if you do not comply or attempt to comply with the Schedule and we then terminate this DRA
for that reason. However, each time you (or your Approved Affiliate) sign a franchise agreement for the next BIG BLUE Swim School to be constructed and developed within the Territory, we will apply the deposit related to that Swim School (which is part of the Development Fee) toward the initial franchise fee due for that Swim School (leaving only the balance of the initial franchise fee due at signing).
Source: Item 23 — RECEIPTS (FDD pages 76–278)
What This Means (2025 FDD)
According to Big Blue Swim School's 2025 Franchise Disclosure Document, the Development Fee is fully earned when the Development Rights Agreement (DRA) is signed by both Big Blue Swim School and the franchisee. This fee serves as consideration for the development rights granted to the franchisee and for reserving the designated territory, excluding others from developing in that area, while the franchisee adheres to the DRA terms.
This means that Big Blue Swim School earns the Development Fee immediately upon signing the DRA, regardless of whether the franchisee successfully develops and opens a swim school. The fee is compensation for the rights and territory exclusivity granted to the franchisee under the DRA.
Furthermore, the Development Fee is generally non-refundable, except under specific conditions outlined in Section 8(c) of the DRA. However, each time a franchisee signs a franchise agreement for a Big Blue Swim School within the reserved territory, the deposit related to that swim school (which is part of the Development Fee) will be applied toward the initial franchise fee due for that swim school, with only the balance of the initial franchise fee remaining due at signing.