What is the geographic limit on the right to operate a Big Blue Swim School franchise?
Big_Blue_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
or the entire Term unless this Agreement is properly terminated under Section 19.
3.C. Territorial Rights
During the Term, we and our affiliates will not own or operate, or allow another franchisee or licensee to own or operate, another BIG BLUE Swim School operating the Swim School Concept that has its physical location within the geographical area described on Exhibit A (the "Area of Protection"). We may modify the Area of Protection only as provided in Exhibit A. If the School's address is unknown as of the Effective Date, we will describe the Area of Protection on an amended and restated Exhibit A that we will send you after we accept the School's site as provided in Section 4.B.
3.D. Reservation of Rights
Except for your location exclusivity with respect to the BIG BLUE Swim School Swim School Concept described in Section 3.C above, we and our affiliates retain all rights with respect to BIG BLUE Swim Schools, the Marks, the offer and sale of similar or dissimilar services and products, and any other activities we and they deem appropriate, whenever and wherever we and
they desire, whether inside or outside the Area of Protection. Specifically, but without limitation, we and our affiliates reserve the following rights:
- (1) to own and operate, and to allow other franchisees and licensees to own and operate, BIG BLUE Swim Schools (whether or not operating the Swim School Concept) at any locations outside the Area of Protection (including at the boundary of the Area of Protection) and on any terms and conditions we and they deem appropriate;
- (2) to own and operate, and to allow other franchisees and licensees to own and operate, at any locations inside the Area of Protection and on any terms and conditions we and they deem appropriate, BIG BLUE Swim Schools not operating the Swim School Concept;
- (3) to offer and sell, and to allow others to offer and sell, inside and outside the Area of Protection, and on any terms and conditions we and they deem appropriate, services and products that are identical or similar to and/or competitive with those offered and sold by BIG BLUE Swim Schools, whether identified by the Marks or other trademarks or service marks, through any advertising media, distribution channels (including the Internet), and shipping and delivery methods and to any customer, no matter where located, but not through BIG BLUE Swim Schools operating the Swim School Concept that have their physical locations inside the Area of Protection;
- (4) to establish and operate, and to allow others to establish and operate, anywhere (including inside or outside the Area of Protection) businesses offering similar services and products under trademarks and service marks other than the Marks;
- (5) to acquire the assets or ownership interests of one or more businesses offering and selling services and products similar to those offered and sold at BIG BLUE Swim Schools (even if such a business operates, franchises, or licenses Competitive Businesses (defined in Section 12 below)), and operate, franchise, license, or create similar arrangements for those businesses once acquired, wherever those businesses (or the franchisees or licensees of those businesses) are located or operating, including within the Area of Protection;
- (6) to be acquired (whether through acquisition of assets, ownership interests, or otherwise, regardless of the transaction form) by a business offering and selling services and products similar to those offered and sold at BIG BLUE Swim Schools, or by another business, even if such a business operates, franchises, or licenses Competitive Businesses inside or outside the Area of Protection; and
- (7) to engage in all other activities this Agreement does not expressly prohibit.
**3.E.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to Big Blue Swim School's 2025 Franchise Disclosure Document, a franchisee is granted an Area of Protection, which defines the geographic limit within which the franchisor will not operate or allow another franchisee to operate a Big Blue Swim School using the Swim School Concept. The specific geographical area is detailed in Exhibit A of the Franchise Agreement. This Area of Protection is granted to the franchisee for the duration of the franchise term, which is ten years from the school's opening date.
However, Big Blue Swim School retains significant rights outside this Area of Protection. They can operate or franchise other Big Blue Swim Schools (whether or not operating the Swim School Concept) outside the Area of Protection, even at its boundary. They also reserve the right to offer and sell similar services and products inside and outside the Area of Protection through various channels, as long as it's not through another Big Blue Swim School operating the Swim School Concept.
Furthermore, Big Blue Swim School can establish businesses offering similar services under different trademarks, acquire businesses similar to Big Blue Swim School, or be acquired by such businesses, regardless of whether these activities occur inside or outside the Area of Protection. These reservations of rights mean that while a franchisee has some territorial protection, Big Blue Swim School retains considerable freedom to operate and expand, potentially in ways that could compete with an existing franchisee outside of their protected area.
Prospective franchisees should carefully review Exhibit A and understand the specific boundaries of their Area of Protection. They should also consider the potential for competition from Big Blue Swim School or other franchisees outside this area, as well as the franchisor's right to offer similar services through alternative channels. Understanding these limitations is crucial for assessing the potential risks and opportunities associated with a Big Blue Swim School franchise.