Where does the CEC Credit Deficiency fee go when paid to Basecamp Fitness?
Basecamp_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
olation | As incurred | Payable only if a required report or financial statement is not delivered when due. | | Type of Fee | Amount (Note 1) | Due Date | Remarks | |---------------|---------------------------|--------------|----------------------------------------------| | Insufficient | $100 per check that you | As incurred | | | Funds Fee | submit to us that is returned for insufficient funds, and $100 each time that we are unable to collect via EFT due to insufficient funds. | | | | CEC Credit | $1.00 per credit | Immediately | You only pay this fee if you fail to meet | | Deficiency | deficiency multiplied by | after notice | your Continuing Engagement Credit | | | the number of Basecamp Studios you own | from us | minimum in any given ye
Source: Item 6 — OTHER FEES (FDD pages 17–24)
What This Means (2025 FDD)
According to Basecamp Fitness's 2025 Franchise Disclosure Document, the CEC Credit Deficiency fee is deposited into the General Advertising and Marketing Fund. This fee is incurred if a franchisee fails to meet the Continuing Engagement Credit minimum in any given year. The fee is calculated at a rate of $1.00 per credit deficiency, multiplied by the number of Basecamp Studios the franchisee owns.
This means that if a franchisee does not fulfill their required engagement credits, they will be charged a fee that directly contributes to the advertising and marketing efforts of the Basecamp Fitness franchise system. The purpose of this fee is likely to incentivize franchisees to maintain their engagement credits, which could be related to training, certifications, or other activities that benefit the brand. By directing the funds into the General Advertising and Marketing Fund, Basecamp Fitness ensures that the money is used to promote the brand and attract more customers, potentially benefiting all franchisees.
For a prospective franchisee, this highlights the importance of meeting the Continuing Engagement Credit minimum to avoid incurring additional costs. It also suggests that Basecamp Fitness is committed to investing in marketing and advertising, which can be a positive factor for franchisees looking to build their customer base. Franchisees should familiarize themselves with the requirements for earning engagement credits and plan accordingly to avoid these deficiency fees.