What reduces the Gross Revenue calculation for a Big Blue Swim School?

According to Big Blue Swim School's 2025 Franchise Disclosure Document, a franchisee's obligation to pay royalties and brand fund contributions is reduced when the school is closed due to condemnation or casualty, but only if the franchisee does not receive insurance proceeds compensating them for lost Gross Revenue during the closure.

This means that if a Big Blue Swim School location is forced to close due to unforeseen circumstances like a natural disaster or government action, the franchisee will not be required to pay royalties or contribute to the brand fund during the period of closure. This can provide significant financial relief during a challenging time. However, this relief is contingent on whether the franchisee receives insurance payments to cover the lost revenue.

If the franchisee's insurance policy compensates them for the lost Gross Revenue during the closure, they will still be obligated to pay royalties and brand fund contributions. This condition ensures that Big Blue Swim School continues to receive its share of revenue, even if the franchisee is not actively generating it due to the closure. Franchisees should carefully review their insurance policies to understand the extent of coverage for business interruptions and lost revenue to anticipate their financial obligations in such situations.

This policy is a double-edged sword for franchisees. While it offers a reprieve from certain financial obligations during closures, it also highlights the importance of adequate insurance coverage. Franchisees need to balance the cost of insurance premiums against the potential financial burden of continued royalty and brand fund contributions, even when their school is not operational.