Backed by an Investment from Level 5 Capital Partners, Big Blue Swim School Prepares to Grow Through Franchising to 150 Units by 2020
Not many franchisors can give credit to the start of their business to losing to Michael Phelps. A competitive swimmer at the University of Michigan, ranked fifth in the world in backstroke and fourth in the U.S., Chris DeJong trained under the same coach as Phelps. For the 2008 Olympics, DeJong finished behind Phelps and missed qualifying by just four-tenths of a second..
“To be perfectly honest, I’m pretty sure if I had made the team, I would have not left the sport with the hunger and desire necessary to start a business. I’m almost certain that personal disappointment fueled the next step in my career,” said DeJong. “I was able to experience swimming at every level from age group swimming to international competitions. I left the sport somewhat disappointed with my competitive swimming career and had a unique perspective on everything that was wrong with swimming, especially at the entry point.”
DeJong soon moved to Chicago and partnered with John Lonergan, a Big Ten all-academic swimmer at the University of Iowa, to coach a local swim team in Evanston, teach lessons and run the aquatics program at North Shore Country Club in Glenview. The duo developed great contacts during this time, including Chicago Cubs co-owner Todd Ricketts (now a member of the Big Blue Swim School board) and, through their combined swimming and teaching experience, created a curriculum focused on achieving fast results. DeJong and Lonergan opened their first standalone swim school concept in Wilmette in 2009, which grew from 600 to 2,200 families essentially overnight. They opened locations in Buffalo Grove (2015), Niles (2016), Hoffman Estates (2017), and will open a fifth location in Chicago’s North Center neighborhood in March 2019.
“From a consumer standpoint, Big Blue Swim School’s four points of execution -- explain, demonstrate, mimic, correct -- allow our child engagement specialists to deliver an experience that actually helps kids learn how to swim,” said Lonergan. “Our proprietary distance-based methodology ensures that we are measuring our students’ progress in the ways that actually matter and more quickly achieve better results. Parents are willing to invest in this because it’s a vital life skill, and they are able to rapidly see not only that their investment has paid off, but more importantly, that their children know how to keep themselves safe in and around water.”
Level 5 Capital Partners Sees Big Blue as the Next Big Brand
In 2017, Level 5 Capital Partners, an investment company that grew from one Core Power Yoga studio to become the third largest national yoga studio operator in less than a decade, acquired a majority stake in Big Blue Swim School, and plans to grow the brand through franchising.
“The consumer proposition, lifetime value of each member and real estate opportunity were what drew us to Big Blue Swim School,” said Chris Kenny, Managing Partner of Level 5 Capital Partners, adding that the $20 billion swimming lessons market*, the brand’s results-oriented curriculum and the real estate in high-traffic areas made available by Amazon and other online businesses were contributing factors.
Big Blue Swim School’s real estate footprint is generally between 10,000 to 12,000 square feet, with 13 lanes across two 91-degree pools, which allows owners to map out class times by age group and make it easy for parents of multiple children to attend classes at the same time. Because teaching positions are filled by full-time child engagement specialists that receive benefits, Big Blue Swim School has less staff turnover, which saves the franchisee time and money and makes parents and children feel more comfortable.
Competitors in the swim school space typically connect new franchise owners to local real estate brokers who source Class C or Class D locations in warehouse areas, while Big Blue Swim School has a team of eight dealmakers canvassing the country to identify trade areas that fit the brand’s member profile.
“Competitors in the space are primarily focused on getting a good deal on rent, and are finding spaces in warehouse districts that are outside of the daily commute for parents. We are taking the opposite approach by using data on our current customers from Lesson Buddy, along with Esite Analytics, including demographics, psychographics, traffic patterns and more, to narrow down the options to the top three sites to present to franchise owners,” said Kenny. “We are literally knocking on doors of properties that fit our profile, even if there’s a current tenant, to make sure we have the very best location. As an experience-based business that drives a lot of traffic to shopping centers, Big Blue Swim School is very attractive to landlords. The right real estate is pivotal to our success from a consumer standpoint, and our turnkey, hands-on approach to sourcing real estate and managing the process from lease negotiation through the construction makes it very easy for franchisees to open locations.”
The investment range for a Big Blue Swim School is $1,767,500 to $3,646,000. The brand is looking for franchise owners to develop in Florida, Texas, Southern California, Denver, Charlotte, Northern New Jersey, Georgia and Washington, D.C., with plans to open45 new locations by end of 2019, and up to 150 by the end of 2020.
Big Blue Swim School will support new franchise owners in a number of other ways, like lead generation through a corporate call center, and marketing through the required franchisee marketing fund, to help franchisees save money on labor and ensure that they are able to focus on running their day-to-day operations.
“Swim schools stack up financially against other top tier franchises but offer a much more rewarding opportunity, and have a longer lifetime customer value,” said Scott Thompson, Chief Development Officer at Big Blue and Level 5 Capital Partners. “We have a strong Item 19, but beyond that, we are attracting people who want to make a difference in their communities and be a part of life’s big moments for families. When you're part of the community, helping children learn to swim and giving parents peace of mind, it gives you a real sense of pride. .You're not just investing in a business, you're investing in a lifestyle and a community, and franchising gives us the opportunity to do that on a larger scale.”
A key brand differentiator that will help the team achieve the expected growth is the brand’s proprietary software developed by DeJong, Lonergan and Chief Technology Officer Casey Morford. Lesson Buddy leverages membership, sales data and operational insights to make business recommendations, including when and where to have class times to maximize return, as well as monitoring the chemical makeup of the pool itself.
“Lesson Buddy is a tool that systematizes the operations for our franchise owners and gives the franchisor access to data across the entire system,” said Kenny. “If a location has an issue with its pool, the equipment functions with smart technology that’s connected to our software, so we are able to deploy facilities managers to the site to take care of any issues. Plus, the parents love being able to easily schedule lessons and view their children’s progress on the app, which also relieves the franchisee of having to hire an employee to manage class scheduling for members.”
With a best-in-class product, strong brand leadership, a growth model and proprietary technology, the brand is set to add 50 locations in 2019 on the way to meeting its vision of 150 units by 2020.
“We are not treating this business like a normal franchise brand,” said Kenny. “With our network of interested multi-unit franchisees, the consumer value proposition and the business opportunity, we anticipate seeing immediate and long-term growth for Big Blue Swim School.”
ABOUT BIG BLUE SWIM SCHOOL
Big Blue Swim School was founded in 2009 by competitive swimmers Chris DeJong and John Lonergan. The first location opened in Wilmette, followed by Niles, Buffalo Grove and Hoffman Estates. In 2017, Level 5 Capital Partners acquired a majority stake in the brand, and is rolling out an aggressive strategy to grow through franchising to 150 locations by 2020. Big Blue Swim School’s real estate footprint, proprietary technology Lesson Buddy, coupled with its practice of employing full-time child engagement specialists that teach based on a proprietary distance-based swimming methodology sets Big Blue up for long-term success.
*World Aquatic Health Conference