Under what conditions does Big Blue Swim School have the right to terminate the Franchise Agreement?
Big_Blue_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
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 the 2025 Big Blue Swim School Franchise Disclosure Document, Big Blue Swim School has specific rights to terminate the Franchise Agreement under certain conditions related to site selection. If a franchisee rejects a school site that Big Blue Swim School's real estate committee has already approved as a "Qualified Site" based on its location, physical characteristics, and commercial lease terms, Big Blue Swim School has the right to terminate the agreement. In this instance, the initial franchise fee or development fee is non-refundable. This condition emphasizes the importance of aligning with Big Blue Swim School's real estate strategy and site selection criteria.
Additionally, Big Blue Swim School can terminate the Franchise Agreement if an acceptable school site is not secured within 210 days after the agreement's effective date, subject to any permitted extensions. As with rejecting a Qualified Site, the initial franchise fee is non-refundable in this scenario. For franchisees also under a Development Rights Agreement (DRA), the deadlines negotiated within the DRA will supersede the 210-day deadline. This clause highlights the time-sensitive nature of site selection and the need for franchisees to act promptly in securing a location.
These termination rights underscore the significance of site selection in the Big Blue Swim School franchise model. Prospective franchisees should carefully consider Big Blue Swim School's site criteria and real estate evaluation process. Franchisees should also be aware of the financial implications of termination related to site selection, particularly the non-refundable nature of the initial franchise fee. Understanding these conditions is crucial for franchisees to avoid potential termination and ensure a successful launch of their Big Blue Swim School location.