If a Big Blue Swim School is damaged by fire, what is the franchisee's immediate obligation?
Big_Blue_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
If the School is damaged by fire or other casualty, you must notify us immediately. If the cost to repair the damage is less than or equal to the Damage Threshold (defined below), or if the cost to repair the damage exceeds the Damage Threshold but you notify us within a reasonable time after the casualty that you intend to repair the damage and operate the School as a BIG BLUE Swim School, then you must repair the damage promptly according to the Brand Standards and this Agreement's other terms and conditions. The "Damage Threshold" means the greater of (a) sixty percent (60%) of the School's market value immediately before the fire or other casualty, or (b) the amount of insurance proceeds made available to you in connection with the fire or casualty. If the damage or repair requires you to close all or any portion of the School, then you must commence reconstruction as soon as practicable (but in any event within four (4) months) after closing the School and reopen for continuous business operations as a BIG BLUE Swim School as soon as practicable (but in any event within twenty-four (24) months) after closing the School, but not without complying with this Agreement's other terms and conditions.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to Big Blue Swim School's 2025 Franchise Disclosure Document, if a school is damaged by fire or other casualty, the franchisee must notify Big Blue Swim School immediately.
Following this notification, the franchisee's subsequent obligations depend on the cost to repair the damage relative to the "Damage Threshold." The Damage Threshold is defined as the greater of (a) 60% of the school's market value immediately before the casualty or (b) the amount of insurance proceeds available to the franchisee. If the repair cost is less than or equal to this threshold, or if it exceeds the threshold but the franchisee informs Big Blue Swim School of their intent to repair and continue operating as a Big Blue Swim School, the franchisee must promptly repair the damage according to the brand standards.
If the damage requires the school to close, reconstruction must begin as soon as practicable, but within four months of closing. The school must then reopen for continuous business operations as a Big Blue Swim School as soon as practicable, but within 24 months of closing, while complying with all other terms of the Franchise Agreement. Failure to notify Big Blue Swim School of the intent to repair if the cost exceeds the Damage Threshold can result in either party terminating the agreement.