Big Blue Swim School’s Item 19: How a Gold-Medal Investment Translates to Industry-Leading Financials

Since coming off the block in 2009, Big Blue Swim School* has emerged as one of the dominant players in the $20 billion swim school industry. Founded by U.S. competitive swimmer Chris DeJong—who finished a mere three-tenths of a second behind Michael Phelps to just miss qualifying for the 2008 Olympics—Big Blue Swim School laps the competition thanks to differentiators like a superior curriculum premised on distance-based methodology; innovative lesson-planning technology, LessonBuddy™; data-driven real estate assessment methodology; and a recession-resistant model, just to name a few. Not only is Big Blue is leading the charge in terms of data-driven and confidence-building swim instruction, but it is also backed by private equity firm Level 5 Capital Partners, the largest CorePower Yoga franchisee and third largest national yoga studio operator.

So what does all of this mean for current and prospective top franchise partners of Big Blue Swim School? The brand has the depth of leadership and strong investment model to not only dominate but to disrupt the swim school world.

To see Big Blue’s strong foundation, investors need to look no further than the brand’s strong financials as demonstrated in the Item 19 in its franchise disclosure document, or FDD. It is important to note that the financials found in Big Blue Swim School’s 2019 FDD reflect the 2018 fiscal year, meaning that they precede the growth that Big Blue has already enjoyed thus far in 2019.

That said, the four Big Blue Swim School locations which had been open and operating for at least one full year (12 months) as of December 31, 2018—and which contributed to the 2019 Item 19 data—indicate the potential for ROI and demonstrate a favorable EBITDA.

The gross revenue for the Big Blue Swim School location open for five years of operation was $2.2 million as of the end of the 2018 fiscal year; for those remaining locations open two years or more, the year-end gross revenue averaged approximately $1.9 million per location. Locations open for two or more years report EBITDA between 23% to 36%, with an average EBITDA per location of nearly 30%.

“Our financial results indicate a strong foundation for our continued swim school franchise growth as we pursue our goal of having 150 units signed by 2021,” said Level 5 Capital Partners’ and Big Blue Swim School’s Chief Development Officer, Scott Thompson. “We’ve already seen strong demand in key markets such as Denver, Salt Lake City, Minneapolis, Charleston, South Florida and Orlando —and of course, our home market of Chicago. We know how to scale the model and translate that into an offering which maximizes our stakeholders’ capital and time.”

Big Blue Swim School fitness franchise partners are well-positioned for success thanks to Big Blue’s integrated approach.

“Big Blue’s systems really do connect all the dots,” said Thompson. “Our pools are heated to a kid-friendly 90 degrees and our proprietary lesson planning and scheduling software, LessonBuddy™, serves as a parent-friendly asset that keeps the kids’ swim instruction schedule stress-free. Our approach to real estate is another major differentiator in the swim school industry: When a franchisee or investor partners with us, we leverage 30 different data points to determine where to build to best position them for success. The best path to ROI is to emerge as a leader at every level of the business—that’s Big Blue Swim School.”

Echoing this, Level 5 Capital’s Managing Partner Chris Kenny said that Big Blue Swim School prioritizes franchisee success by centering “a very high level of franchisor support.”

“We are a very high-service franchisor,” said Kenny. “We connect the dots so that the education franchise partner can be focused on service delivery to the customer, and on hiring, retaining and training the best employees possible to deliver those services.”

The growth in key markets support Kenny’s and Thompson’s point. With a sound offering and revenue-rich model, Big Blue Swim School has expanded its signed footprint to nearly 50 locations and is on-track to achieve its goal of 150 signed by 2021. In terms of the likelihood of impressive returns, the time has never been better to take the plunge and invest in a Big Blue Swim School.

The total investment necessary to begin operation of a new Big Blue Swim School is $1,825,500 to $3,687,000 (including real estate costs). To learn more or inquire about Big Blue Swim School, visit https://diveinwithbigblue.com/.