Under what conditions does Big Blue Swim School have the absolute right to reject a site?
Big_Blue_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
We will not unreasonably withhold our acceptance of a site if, in our experience and based on the factors outlined above, the proposed site is not inconsistent with sites that we regard as favorable or that otherwise have been successful sites in the past for BIG BLUE Swim Schools. However, we have the absolute right to reject any site not meeting our criteria or to require you to acknowledge in writing that a site you prefer is accepted but not recommended due to its incompatibility with certain factors that bear on a site's suitability as a location for a BIG BLUE Swim School. You must evaluate and ultimately approve the selection of the School's site. (Franchise Agreement—Section 4.B;
Development Rights Agreement—Section 5) We do not own locations for lease to franchisees. Under the DRA, we first must accept each new site you propose for each new BIG BLUE Swim School. Our then-current standards for sites will apply.
We have the right to terminate the Franchise Agreement (and, in limited circumstances, the Development Rights Agreement) if you reject a School site the location and physical and other characteristics of which, and the proposed commercial-lease terms for which (as encompassed in a lease letter of intent that we or your third-party vendor negotiated or reviewed), were accepted by our real-estate committee (a "Qualified Site"). (Franchise Agreement—Section 4.B; Development Rights Agreement—Section 5) There is no refund of any initial franchise fee or development fee upon such termination.
If an acceptable School site is not found and secured within 210 days after the Franchise Agreement's effective date (subject to any permitted extension), then we have the right to terminate the Franchise Agreement. The initial franchise fee is not refundable. (Franchise Agreement—Sections 4.B and 4.C) If we and you (or your affiliate) are parties to a DRA, the negotiated deadlines specified in the DRA will supersede certain deadlines specified above. (DRA—Section 5)
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 37–51)
What This Means (2025 FDD)
According to Big Blue Swim School's 2025 Franchise Disclosure Document, while they will not unreasonably withhold acceptance of a site that aligns with their experience and successful past locations, Big Blue Swim School retains the absolute right to reject any site that does not meet their criteria. This means that even if a franchisee prefers a particular location, Big Blue Swim School can reject it outright if it fails to meet their standards.
Furthermore, Big Blue Swim School can require the franchisee to acknowledge in writing that a preferred site, while accepted, is not recommended due to incompatibility with factors affecting its suitability. This highlights the importance of aligning site selection with Big Blue Swim School's criteria to avoid potential conflicts or less-than-ideal locations. The franchisee is responsible for evaluating and ultimately approving the school's site.
Big Blue Swim School also has the right to terminate the Franchise Agreement if the franchisee rejects a 'Qualified Site'. A 'Qualified Site' is one where the location, physical characteristics, commercial lease terms (as negotiated or reviewed by Big Blue Swim School's real estate committee) have been accepted by their real-estate committee. If a franchisee rejects such a site, Big Blue Swim School can terminate the agreement without refunding any initial franchise or development fees. This underscores the significance of carefully considering sites approved by Big Blue Swim School, as rejecting them can lead to termination of the franchise agreement and loss of investment.
Additionally, if an acceptable site is not secured within 210 days after the Franchise Agreement's effective date (subject to any permitted extension), Big Blue Swim School has the right to terminate the Franchise Agreement, and the initial franchise fee is not refundable. This clause emphasizes the importance of timely site selection and securing a location within the specified timeframe to avoid potential termination of the agreement and loss of the initial franchise fee.