Can a Big Blue Swim School franchisee pledge property displaying the Marks as collateral?
Big_Blue_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
You may not pledge, hypothecate, or grant a security interest in any property that bears or displays the Marks (unless the Marks are readily removable from such property) and must advise your proposed lenders of this restriction.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 FDD, a Big Blue Swim School franchisee is restricted from pledging property that bears or displays the brand's trademarks as collateral, unless the marks are easily removable. This restriction is put in place to protect the integrity and consistent representation of the Big Blue Swim School brand.
This means that franchisees need to be aware of this limitation when seeking financing. They must also inform potential lenders of this restriction. This could impact the types of assets a franchisee can use as collateral for loans and may require them to seek alternative financing options or use assets that do not display the Big Blue Swim School marks.
This stipulation is fairly common in franchising, as franchisors want to maintain control over their brand's image and prevent any misuse or misrepresentation. By preventing the pledging of branded property, Big Blue Swim School aims to ensure that its trademarks are not compromised in the event of a franchisee's financial difficulties or foreclosure.