Under what circumstances is the initial franchise fee for a Big Blue Swim School refundable?
Big_Blue_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
Agreement
You must pay us a $50,000 initial franchise fee in a lump sum when you sign your Franchise Agreement. It is not refundable under any circumstances. We did not collect any initial franchise fees during 2024. (We charge a reduced initial franchise fee for the second and each subsequent BIG BLUE Swim School you develop under a Development Rights Agreement (see below)).
You must conduct a public relations and market introduction program for the School. We expect this program to begin approximately 5 months before and to continue for approximately 3 months after the School opens (although we have the right to specify a different timeframe). We will consult with you about what type of public relations and market introduction program we believe is most suitable for your School and will create and implement the program for you.
Source: Item 5 — INITIAL FEES (FDD pages 12–13)
What This Means (2025 FDD)
According to Big Blue Swim School's 2025 Franchise Disclosure Document, the initial franchise fee of $50,000 is generally not refundable under any circumstances for a standard Franchise Agreement. The document states, "It is not refundable under any circumstances." This means that once a franchisee signs the Franchise Agreement and pays the initial fee, they cannot get a refund, regardless of whether they proceed with opening the swim school. This is a fairly standard practice in franchising, as the initial fee compensates the franchisor for the initial services and expenses incurred in evaluating and setting up the new franchisee.
However, if a franchisee signs a Development Rights Agreement (DRA) to develop multiple Big Blue Swim School locations, the development fee, which includes the initial franchise fee for the first school and deposits for subsequent schools, is also generally non-refundable. The FDD specifies that if the franchisee chooses not to proceed with the development after signing the DRA, Big Blue Swim School has the right to retain the entire development fee.
There is one exception where a portion of the development fee may be refundable. If Big Blue Swim School exercises its Qualified Site Lease Rights (as described in Item 12 of the FDD) and the franchisee then elects to develop one less Big Blue Swim School in their territory, the franchisee will receive a pro-rata refund of the development fee allocated to the school that is the subject of the exercised rights. This means that if the development fee covered multiple locations and one location is removed due to the franchisor's actions, the franchisee would get back the portion of the fee associated with that specific location.
In summary, the initial franchise fee for a single Big Blue Swim School is non-refundable. For franchisees entering into a Development Rights Agreement, the development fee is also non-refundable unless Big Blue Swim School exercises its Qualified Site Lease Rights, leading to a reduction in the number of schools developed. Prospective franchisees should carefully consider these conditions and the implications of signing either a Franchise Agreement or a Development Rights Agreement, understanding that the fees are generally non-refundable.