During what period after a Big Blue Swim School commences operation are capital modifications restricted?
Big_Blue_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
for all of which the timing and amounts are not limited during the Term, we will not obligate you to make any capital modifications:
- (i) i. during the first three (3) years after the School commences operation; or
- (ii) ii. during the last two (2) years of the Term, unless the proposed capital modifications during those last two (2) years (the amounts for which are not limited) are in connection with School upgrades, remodeling, refurbishing, and similar activities for your acquisition of a successor franchise (as provided in Section 18(4)).
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to Big Blue Swim School's 2025 Franchise Disclosure Document, there are specific periods when the franchisor will not mandate capital modifications for its franchisees. Generally, Big Blue Swim School restricts required capital modifications during the first three years of operation. Additionally, capital modifications are also restricted during the last two years of the franchise term. However, this restriction does not apply to modifications related to school upgrades, remodeling, refurbishing, or similar activities associated with acquiring a successor franchise.
This means that for the initial three years after opening a Big Blue Swim School, franchisees can expect a degree of stability regarding required capital investments in the facility. This can help with financial planning and allow the franchisee to focus on establishing the business without the immediate pressure of potential upgrade costs. Similarly, the restriction during the final two years offers some protection against mandated large-scale investments as the franchise term nears its end, unless it's tied to a successor franchise agreement.
However, Big Blue Swim School franchisees should be aware that this protection has exceptions. The franchisor retains the right to require capital modifications related to changes in the computer system, signage and logos, transfers, changes required by the lease or applicable law, and general maintenance obligations. Furthermore, during the fourth through eighth years of operation, Big Blue Swim School may require franchisees to alter the school's appearance, layout, or design to meet current brand standards, potentially obligating franchisees to make substantial investments. Franchisees should carefully consider these potential future costs and ensure they have adequate financial resources to meet these obligations if they arise.