In Minnesota, when must a Big Blue Swim School franchisee pay the initial franchise fee?
Big_Blue_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
MINNESOTA
- The following language is added after the last paragraphs in Items 5 and 7 of the Franchise Disclosure Document:
Despite the payment provisions above, we will defer your payment of the initial franchise fee due to us under the Franchise Agreement until we have fulfilled all our initial obligations to you under the Franchise Agreement and you have commenced operating the BIG BLUE Swim School. You must pay us the initial franchise fee on the day you begin operating your BIG BLUE Swim School.
Despite the payment provisions above, we will defer your payment of the development fee due to us under a Development Rights Agreement until we have fulfilled all our initial obligations to you and you have commenced operating your first BIG BLUE Swim School. You must pay us the development fee due under a Development Rights Agreement on the day you begin operating your first BIG BLUE Swim School.
Source: Item 23 — RECEIPTS (FDD pages 76–278)
What This Means (2025 FDD)
According to the 2025 Big Blue Swim School Franchise Disclosure Document, for franchises governed by Minnesota law, the payment of the initial franchise fee is deferred. Big Blue Swim School will postpone the payment until they have fulfilled all their initial obligations to the franchisee under the Franchise Agreement.
Specifically, the franchisee is not required to pay the initial franchise fee until the franchisee has commenced operating their Big Blue Swim School. The franchisee must pay the initial franchise fee on the day they begin operating their Big Blue Swim School. This deferral also applies to the development fee under a Development Rights Agreement, where payment is deferred until Big Blue Swim School has fulfilled its obligations and the franchisee has commenced operating their first swim school.
This arrangement is beneficial for prospective franchisees in Minnesota as it reduces the upfront financial burden. Franchisees are not required to pay the initial franchise fee until they are ready to open their doors, which can help with cash flow during the initial setup phase. This deferred payment structure aligns the franchisor's interests with the franchisee's success, as Big Blue Swim School only receives the fee once the franchisee is operational.