After the Basecamp Fitness Agreement expires, what is the geographic scope of the non-compete restriction?
Basecamp_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
- B.
After Expiration, Termination, or Transfer.
You will not, directly or indirectly for a period of two (2) years after the transfer by you, or the expiration or termination of this Agreement, on your own account or as an employee, consultant, partner, officer, director, shareholder, lender, or joint venturer of any other person, firm, entity, partnership, corporation or company, own, operate, lease to or lease from, franchise, conduct, engage in, be connected with, have any interest in or assist any person or entity engaged in offering interval training classes or high-intensity guided workouts, within the Protected Territory or within a ten (10) mile radius of any Basecamp Fitness studio, wherever located, whether within the Protected Territory or elsewhere.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Basecamp Fitness's 2025 Franchise Disclosure Document, after the agreement expires or terminates, a franchisee is restricted from engaging in or being connected with any business offering interval training classes or high-intensity guided workouts. This restriction applies for two years. The geographic scope includes the franchisee's Protected Territory and extends to a 10-mile radius of any Basecamp Fitness studio, regardless of location. This means that even if a franchisee's studio is in one territory, the non-compete extends to any Basecamp Fitness studio within that 10-mile radius, even if it's in a different territory.
Basecamp Fitness requires these restrictions to protect the brand and the system, including other franchisees. The company believes these measures are necessary to prevent franchisees from using the training and information they receive to compete against Basecamp Fitness or to limit the company's ability to enter new markets. The FDD states that the time period and scope of these prohibitions are considered reasonable and necessary to protect Basecamp Fitness if the agreement expires or is terminated for any reason.
However, it's important to note that these non-compete clauses may not be fully enforceable in all states. For example, the North Dakota Addendum to the Franchise Agreement states that covenants not to compete are generally considered unenforceable in North Dakota. Similarly, the California Addendum indicates that the covenant not to compete extending beyond the termination of the franchise may not be enforceable under California law. Therefore, franchisees should be aware of the specific laws in their state regarding non-compete agreements.
An exception to the non-compete exists for the purchase of publicly traded securities. A franchisee can own up to 5% of the securities of a corporation engaged in a competitive business without violating the non-compete agreement. This allows for some investment in related businesses without triggering the restrictions.