Are Big Blue Swim School development rights assignable?
Big_Blue_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in franchise or other agreement | Summary |
|---|---|---|
| v. Choice of forum | 22.H of Franchise Agreement | Subject to arbitration requirements, litigation must be (with limited exception) in courts closest to where we (or then-current franchisor), have our principal business address when the action is commenced (it currently is in Atlanta, Georgia) (subject to applicable state law). |
| w. Choice of law | 22.G of Franchise Agreement 14(a) of SaaS Agreement | Federal law and Georgia law apply under Franchise Agreement (subject to applicable state law). |
| Georgia law governs SaaS Agreement (subject to applicable state law). | ||
| Provision | Section in Development Rights Agreement | Summary |
| a. Length of the franchise term | 6 | Term expires on date when final BIG BLUE Swim School under Schedule opens for business or is scheduled to open for business (whichever is earlier). |
| b. Renewal or extension of the | Not applicable | You have no right to renew or extend development rights. |
| term | ||
| c. Requirements for franchisee | Not applicable | You have no right to renew or extend development rights. |
| to renew or extend | ||
| d. Termination by franchisee | Not applicable | You have no contractual right to terminate Development Rights Agreement (except as state law allows). |
| e. Termination by franchisor | Not applicable | We have no right to terminate Development Rights Agreement without cause. |
| without cause | ||
| f. Termination by franchisor | 7 | We have right to terminate Development Rights Agreement if you commit one of several violations. |
| with cause | ||
| g. “Cause” defined curable | 7 and 8 | You have 10 days to cure rejection of Qualified Site for first BIG BLUE Swim School to be constructed and developed in your Territory |
| defaults | ||
| h. “Cause” defined non- | 7 | Non-curable defaults are failure to satisfy any deadline under development Schedule, breach of any other obligation, we terminate any franchise agreement with you or your Approved Affiliate in compliance with its terms, you (or an Approved Affiliate’s) terminate any franchise agreement |
| curable defaults | ||
| Provision | Section in Development Rights Agreement | Summary with us for any (or no) reason, we deliver formal written notice of default to you (or your Approved Affiliate) under a franchise agreement and you (or your Approved Affiliate) fail to cure the default within the required timeframe, or you (or your Approved Affiliate) cease operating any BIG BLUE Swim School without our prior written approval. |
| i. Franchisee’s obligations on | 1 and 7 | Upon termination or expiration of Development |
| termination/nonrenewal | Rights Agreement, you will lose all rights to develop BIG BLUE Swim Schools in your Territory. | |
| j. Assignment of contract by | 9 | No restriction on our right to sell or transfer |
| franchisor | Development Rights Agreement or our ownership interests without your approval. | |
| k. “Transfer” by franchisee | 9 | Includes transfer of Development Rights |
| defined | Agreement or any ownership interest in you or your owner (if that owner is an entity). | |
| l. Franchisor approval of | 9 | No transfers without our prior written consent; |
| transfer by franchisee | development rights are not assignable. | |
| m. Conditions for franchisor | 9 | Development rights are not assignable; w |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 61–69)
What This Means (2025 FDD)
According to Big Blue Swim School's 2025 Franchise Disclosure Document, development rights are not assignable. Item 17 details the conditions for franchisor approval of transfer, stating explicitly that development rights are not assignable. This means a franchisee cannot transfer their Development Rights Agreement to another party.
This restriction on assignment has significant implications for potential Big Blue Swim School franchisees. It means that if a franchisee wishes to exit the development rights agreement before its natural expiration, they cannot simply sell or transfer the agreement to a third party. They would need to negotiate with Big Blue Swim School to terminate the agreement or find another solution, which may not be guaranteed.
This is a fairly common restriction in franchising, as franchisors typically want to maintain control over who is developing their brand in specific territories. By preventing the free transfer of development rights, Big Blue Swim School can ensure that any new developers meet their standards and have the necessary resources and commitment to successfully develop the territory. Prospective franchisees should carefully consider this restriction and its potential impact on their exit strategy or future plans before entering into a Development Rights Agreement with Big Blue Swim School.