Besides interest, what other fees are the Liquidity Reserve Notes subject to for Basecamp Fitness?
Basecamp_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
Advances under the Liquidity Reserve Notes shall bear interest at the Prime Rate plus 3.00%. The Liquidity Reserve Notes will also be subject to certain commitment fees in respect to the unutilized portion of the commitments of the investors thereunder. No borrowings were outstanding against the Liquidity Reserve Notes as of December 31, 2024 and 2023.
Source: Item 23 — RECEIPTS (FDD pages 62–248)
What This Means (2025 FDD)
According to Basecamp Fitness's 2025 Franchise Disclosure Document, the Liquidity Reserve Notes are subject to fees beyond just interest. Specifically, the Liquidity Reserve Notes are subject to certain commitment fees. These commitment fees are related to the unutilized portion of the commitments from the investors.
In practical terms, this means that Basecamp Fitness may have to pay fees on any portion of the Liquidity Reserve Notes that they have not yet borrowed or used. This is a common practice in financing agreements, as it compensates the investors for setting aside capital that Basecamp Fitness might potentially need.
As a prospective franchisee, it is important to understand these additional fees, as they can impact the overall cost of financing and the financial obligations of the franchise. Franchisees should inquire about the specific commitment fee structure, including how it is calculated and when it is applied, to fully assess the financial implications.