Can Big Blue Swim School franchisees purchase operating assets from non-approved suppliers?
Big_Blue_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
We may periodically designate and approve Brand Standards, manufacturers, suppliers, and/or distributors for the Operating Assets and other services and products we periodically authorize for use or sale by BIG BLUE Swim Schools. You must purchase or lease all Operating Assets and other services and products you use or sell at the School only according to our Brand Standards and, if we require, only from suppliers or distributors we designate or approve (which may include or be limited to us, certain of our affiliates, and/or other restricted sources). We and/or our affiliates may derive revenue based on your purchases and leases, including, without limitation, from charging you (at prices exceeding our and their costs) for services and products we or our affiliates sell you and from promotional allowances, volume discounts, and other amounts paid to us and our affiliates by suppliers that we designate, approve, or recommend for some or all BIG BLUE Swim School franchisees. We and our affiliates may use all amounts received from suppliers, whether or not based on your and other franchisees' prospective or actual dealings with them, without restriction for any purposes we and our affiliates deem appropriate.
7.D.1 If you want to purchase or lease any Operating Assets or other products or services from a supplier or distributor we have not then approved (if we require you to buy or lease the product or service only from an approved supplier or distributor), then you must establish to our reasonable satisfaction that the product or service is of equivalent quality and functionality to the product or service it replaces and the supplier or distributor is, among other things, reputable, financially responsible, and adequately insured for product liability claims. You must pay upon request any actual expenses and TRE we incur to determine whether or not the products, services, suppliers, or distributors meet our requirements and specifications.
7.D.2 We may condition our written approval of a supplier or distributor on requirements relating to product quality and safety; third-party lab testing; prices; consistency; warranty; supply-chain reliability and integrity; financial stability; customer relations; frequency, economy, and efficiency of delivery; concentration of purchases; standards of service (including prompt attention to complaints); and other criteria. We have the right to inspect the proposed supplier's or distributor's facilities and to require the proposed supplier or distributor to deliver product samples or items, at our option, either directly to us or to any third party we designate for testing. If we approve a supplier or distributor you recommend, you agree that we may allow other BIG BLUE Swim Schools to purchase or lease the Operating Assets or other products or services from those suppliers or distributors without limitation and without compensation to you.
7.D.3 Despite the foregoing, we may limit the number of approved suppliers and distributors with which you may deal, designate sources you must use, and refuse any of your requests for any reason, including, without limitation, because we have already designated an exclusive source (which might be us or one of our affiliates) for a particular item or service or believe that doing so is in the BIG BLUE Swim School network's best interests. You acknowledge that it might be disadvantageous from a cost and service basis to have more than one supplier in a given market area, and that we have the right to consider the impact of any supplier approval on our and our franchisees' ability to obtain the lowest distribution costs and best service. However, we make no guaranty, warranty, or promise that we will obtain the best pricing or most advantageous terms on behalf of BIG BLUE Swim Schools. We also do not guaranty the performance of suppliers and distributors to BIG BLUE Swim Schools. We are not responsible or liable if the products or services provided by a supplier or distributor fail to conform to or perform in compliance with Brand Standards or our contractual terms with the supplier or distributor.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to Big Blue Swim School's 2025 Franchise Disclosure Document, franchisees are generally required to purchase or lease all operating assets and other services and products according to Big Blue Swim School's brand standards and, if required, only from designated or approved suppliers. These suppliers may include Big Blue Swim School itself, its affiliates, or other restricted sources. Big Blue Swim School and its affiliates may derive revenue from these purchases and leases through markups and other arrangements with suppliers. This arrangement is common in franchising, allowing franchisors to maintain quality control and potentially generate additional revenue.
However, if a Big Blue Swim School franchisee wants to purchase or lease operating assets or other products or services from a supplier or distributor that has not been approved, they can request approval from Big Blue Swim School. To gain approval, the franchisee must demonstrate to Big Blue Swim School's reasonable satisfaction that the product or service is of equivalent quality and functionality to the approved product or service. Additionally, the supplier or distributor must be reputable, financially responsible, and adequately insured for product liability claims. The franchisee will be responsible for covering any expenses Big Blue Swim School incurs to evaluate the proposed product, service, supplier, or distributor.
Big Blue Swim School may also set conditions for approving a supplier or distributor, including requirements related to product quality and safety, third-party lab testing, prices, consistency, warranty, supply-chain reliability, financial stability, customer relations, delivery efficiency, and service standards. Big Blue Swim School has the right to inspect the supplier's facilities and request product samples for testing. If Big Blue Swim School approves a supplier recommended by a franchisee, other Big Blue Swim School locations can also purchase from that supplier without compensating the recommending franchisee. Big Blue Swim School may limit the number of approved suppliers, designate mandatory sources, and refuse requests for any reason, including having an exclusive source for a particular item or service or believing it is in the best interest of the Big Blue Swim School network. While Big Blue Swim School aims to obtain the lowest distribution costs and best service, it does not guarantee the best pricing or terms and is not responsible for supplier performance or compliance with brand standards.