What section of the Big Blue Swim School franchise agreement discusses the reservation of rights?
Big_Blue_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 Big Blue Swim School Franchise Disclosure Document, Section 3.D of the franchise agreement outlines the franchisor's reservation of rights. This section clarifies that, aside from the franchisee's location exclusivity for a Big Blue Swim School operating the Swim School Concept within their Area of Protection as described in Section 3.C, Big Blue Swim School and its affiliates retain all rights concerning the Big Blue Swim School brand, trademarks, and the offering of similar or different services and products. These rights extend to any activities the franchisor deems appropriate, both inside and outside the franchisee's Area of Protection.
Specifically, Big Blue Swim School reserves the right to operate or franchise Big Blue Swim Schools outside the Area of Protection, even at its boundary, under any terms they deem appropriate. They can also operate or franchise Big Blue Swim Schools inside the Area of Protection that do not operate the Swim School Concept. Furthermore, Big Blue Swim School can offer and sell services and products, including those identical or similar to those offered by franchisees, through any advertising media or distribution channels, as long as it's not through Big Blue Swim Schools operating the Swim School Concept within the franchisee's Area of Protection.
Big Blue Swim School also retains the right to establish businesses offering similar services under different trademarks, acquire businesses selling similar services (even competitive ones), and be acquired by such businesses, regardless of location. Finally, they reserve the right to engage in any activities not expressly prohibited by the franchise agreement. This comprehensive reservation of rights gives Big Blue Swim School significant flexibility in its business operations and future strategies, which could potentially impact individual franchisees.
For a prospective franchisee, this section highlights the importance of understanding the scope of exclusivity granted and the potential for Big Blue Swim School to engage in activities that might compete with or otherwise affect their franchise. It is crucial to carefully review Exhibit A, which defines the Area of Protection, and to consider the implications of Big Blue Swim School's reserved rights when evaluating the franchise opportunity.