The game continues back in the Garamsythe Waterway. Fran and Balthier will join up with Vaan to help him traverse through this dungeon.
They are certainly unique characters and you should take some time to get familiar with each of the them; their strengths and their weaknesses, equipment setups, etc. Check out the Characters section of the strategy guide for more information.
When selecting a job for Fran and Balthier, make sure that you have at least one character between your four current characters that can cast important spells that you will need early on in the game, specifically: 
Blind, 
Protect and curative spells.
You should make sure that one of these four characters has either the White Mage, Time Battlemage, Red Battlemage or potentially a Black Mage.
Check out the Party Setup for tips on different party roles and check out the Strategies for Picking Jobs Combinations section for tips on which party members should have which jobs.
Before you spend all of their License Points, walk down the stairs to have Balthier give you a very general overview of the Gambit System.
Gambits allow you to program characters to perform certain actions during the course of battle. The most obvious Gambit that all characters will come equipped with is to attack the same enemy as the party leader (in this case Vaan), but you can also set up characters to perform actions under certain scenarios.
For example, you can have either Balthier or Fran use Cure or use a 
Potion item whenever an ally (teammate) falls below 70% HP.
Check out the Gambit Section for more information on different setups you can use. This walkthrough will give you examples of ideal Gambit setups for each section of the game to help you progress through each chapter.
Make sure to use some of your License Points on the License Board to give both Balthier and Fran more Gambit slots. Set them up so that at least one of them (likely Fran) will use an 
Antidote or Eye Drops on an Ally if required (or Blindna if you have learned it) and to use either Cure or a Potion when a character falls below 70%.
Use the examples shown below to give you an idea of how to set up the Gambits. In the Zodiac Age version of the game, Fran, as well as both of the other two female characters, come pre-equipped with the ability to use Cure.
Walk forward and examine the two bodies lying on the ground. Balthier will explain that these two were likely trying to attack Vayne and were killed during their mission. Proceed through into the next area.
Take your immediate left to find another green and gold Urn which contains the map of the Garamsythe Waterway. The path through the Waterway is extremely linear from here – there really is no way to get lost. Use the map in your inventory to help you traverse through the dungeon.
Follow the pathway around the sewer. You will run into your first Gigantoad as you progress down the pathway.
they are a little bit more difficult to defeat but do not require any specialized strategy. Just be prepared to use a Cure or a Potion if you take too many attacks during the battle.
Follow the pathway along until you reach the Save Crystal and use it to save your game. There is a larger battle that will be coming up shortly involving four Imperial Swordsmen.
Make sure that you have your Gambits set up properly, specifically that either Fran or Balthier have some type of healing Gambit (either Cure or Potion) set to heal allies that fall below 70% HP.
March down the stairs when you are ready. There is a short cutscene involving a young woman who is battling against four Imperial Swordsmen. The Imperial Swordsmen go down fairly easily but be ready with healing spells and Potion just in case you run into any problems.
"Amalia" (as the young woman calls herself) will join your party at the end of the fight. You will not be able to adjust her Gambits but she will assist you in the upcoming battles. She is a “guest” in the party as described by Balthier. She has the following Gambits automatically enabled:
Potion on anyone who falls below 80% HP)Phoenix Down on any party member who is KO’d)
Note that in the Zodiac Age version of the game you can view and adjust a Guest’s Gambits. Another change to the Guest system is that if the Guest uses items on a party member they will draw these items from your actual inventory.
Take the time to go back and save your game and heal up at the Save Crystal before you continue through the Garamsythe Waterway. Proceed down the walkway into the next area.
Before continuing on, set up one of your characters with a new Gambit that would have them casting Fire on enemies instead of attacking (if you have access and purchased the spell). The enemies that you are about to fight are extremely weak to Fire-based Magick.
Fran automatically has Fire Magick by default in the original version of the game. Set up your Gambits for Fran as shown in the screenshot below:
The fight can easily be completed without the use of Fire though, so don’t panic if you don’t have it already.
Level: 4
HP: 360-420
Steal: Potion (55%), 
Caramel (10%), Sagittarius Gem (3%)
Make sure that all of your party members are focusing on the same Flan. It will go down relatively easily if Fran is casting Fire on it. Have Vaan cast Cure or use a Potion as required so that the other party members can focus on damage. The fight is relatively easy with “Amalia” in the party and she will jump in with Potions and a Phoenix Down if at all required. Use Eye Drops on any team member who has Blind cast on them (unless you had a Gambit set up with Blindna or Eye Drops as described above).
A video of the battle in the Zodiac Age version is included below:
Once the battle is over, you have the option of wandering back to the Save Crystal to save and to heal your party member’s HP and MP. This could save you some Potions and healing items as the Save Crystal will remove negative status effects like Blind as well.
Search the area where you defeated the Flans to find two treasure chests as well before you leave into the next area. Lastly, make sure to switch any of your character’s Gambits from Fire Magick back to a regular attack.
There is a treasure chest in the center of the next room and the team will be ambushed by a Gigantoad as it approaches the edge of the waterway on the west side of the room.
Kill the Gigantoad and proceed around the pathway killing the Garchimaceras and Ghosts that you come across. They are easy to defeat and do not require any advanced tactics.
This is another straightforward section of the Garamsythe Waterway with a relatively linear pathway. Search the area for any treasure chests as you continue through to the northeast.
Search this last area for more treasure chests and then save your game at the Save Crystal. The next room contains a boss battle. Make absolutely sure that you do not have a Fire Magick Gambit setup.
Have one of your characters use Protect on the others if you have that spell available to you. Proceed through the doorway into the Overflow Cloaca when you are ready.
You will be thrust into a boss battle as soon as you enter this next area.
Level: 7
HP: 3,571
Steal: Potions (55%), Phoenix Down (10%), Grimoire Togail (3%)
First and foremost, let’s get the obvious out of the way. Do not use Fire-elemental Magick against Firemane. Fire element enemies are weak against Water-based Magick which you will not have at this point in the game. You can take advantage of this weakness by luring Firemane into the water which will cause your attacks to do significantly more damage. It will also prevent it from using some of its more powerful fire-based attacks. Use the 
Button (Flee) to force all of your party members to run down into the water.
Make sure that healing duties are spread across your various characters. Don’t be afraid to step in with manual commands and have Vaan throw out some Cure Magick or Potions as one party member is not enough to keep everyone healed. It will likely be required when Firemane starts using some of its Area of Effect (AoE) attacks that hit multiple party members.
Amalia will automatically jump in with Potions and Phoenix Downs to assist you during the fight, which leaves Balthier and Fran to do most of the attacking. Just watch out for the big attacks when its HP gets low and you should be fine.
A video of the battle in the Zodiac Age version is included below:
Firemane will escape the battle before you kill it and the team will be ambushed and captured by a huge group of Imperial Guards once the battle has concluded. The soldiers are accompanied by Vayne Solidor.
There are a few more cutscenes involving Vaan and Penelo back up in Lowtown, and another cutscene involving Vaan speaking to his brother Reks, before the game continues in a prison, also known as the Nalbina Dungeons.
