How does Basecamp Fitness account for cloud computing arrangements that contain a software license element?

According to Basecamp Fitness's 2025 Franchise Disclosure Document, technology fees are collected for software licenses and other technology provided to clubs and studios. These fees cover the development or purchase of software licenses or sublicenses that franchisees are required to use to operate their Basecamp Fitness club or studio. The revenue from these technology fees is billed and recognized monthly as services are rendered. For accounting purposes, Basecamp Fitness records these technology fees within franchise royalties on the consolidated statements of comprehensive income.

This means that a portion of the monthly royalties paid by Basecamp Fitness franchisees is allocated to cover the costs associated with the software and technology they are required to use. This approach ensures that franchisees have access to necessary technology and software, while Basecamp Fitness Franchisor can manage and account for these technology-related revenues and expenses in a standardized manner.

Prospective franchisees should understand that these technology fees are not a separate, additional charge, but rather are included within the overall franchise royalty structure. This integrated approach simplifies the billing process and ensures that franchisees are continuously supported with the necessary technology to operate their studios effectively. Franchisees should inquire about the specific software and technology covered by these fees to fully understand the value they receive.