Under what condition will Big Blue Swim School prorate the Minimum Royalty?
Big_Blue_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
d. The Software License Fee is payment for your right to use our affiliate's proprietary BIG BLUE Swim School software ("LESSONBuddy") in operating your School.
Notwithstanding the above, you agree to pay us a minimum Software License Fee for each four (4)-week period during the Term equal to no less than One Thousand Five Hundred Dollars ($1,500), as periodically increased in accordance with Section 5.H below (the "Minimum Software License Fee"). We will prorate the Minimum Software License Fee payable based on the then-current Calculation Period for the Software License Fee. If the Software License Fees you pay us, based on the then-applicable percentage (not to exceed two percent (2%)) of the School's Gross Revenue during the applicable Calculation Period, do not equal the prorated amount of the Minimum Software License Fee for that Calculation Period, you must pay us the deficiency (in addition to all other amounts regularly due) on or before the Payment Day we specify (we may debit the deficiency automatically, as provided in Section 5.E below). The Minimum Software License Fee will not begin until after you hav
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to Big Blue Swim School's 2025 Franchise Disclosure Document, the Minimum Software License Fee, which is initially $1,500 for each four-week period, will be prorated based on the then-current Calculation Period for the Software License Fee. This means that if the Calculation Period is less than four weeks, the Minimum Software License Fee will be adjusted accordingly.
In practical terms, this proration ensures that Big Blue Swim School franchisees are not overcharged if the Calculation Period is shorter than the standard four-week period. This could occur during the initial setup phase or if there are changes to the billing cycle. The proration is based on the percentage of the School's Gross Revenue during the applicable Calculation Period, which should not exceed two percent.
It's important to note that the Minimum Software License Fee does not begin until after the Big Blue Swim School location has been in operation for twelve weeks. If the Software License Fees paid by the franchisee, based on the applicable percentage of Gross Revenue, do not meet the prorated Minimum Software License Fee for that Calculation Period, the franchisee must pay the difference by the specified Payment Day.