In Basecamp Fitness's consolidated statements of cash flows, what is restricted cash combined with when reconciling the beginning and end of period balances?

According to Basecamp Fitness's 2025 Franchise Disclosure Document, restricted cash, which consists of franchisee contributions held in a general advertising and marketing fund, is combined with cash and cash equivalents when reconciling the beginning and end of period balances in the consolidated statements of cash flows. This means that for financial reporting purposes, Basecamp Fitness treats these restricted funds as part of its overall cash position when showing how cash balances change from one period to the next.

For a prospective franchisee, this is important because it provides insight into how Basecamp Fitness manages and reports its advertising funds. The funds are specifically used for advertising and marketing expenditures. By combining restricted cash with overall cash and cash equivalents, Basecamp Fitness is indicating that these funds are readily available for their intended purpose, even though their use is limited.

This accounting practice is fairly common, as it gives a clearer picture of the company's liquid assets. It also assures franchisees that the advertising fees they contribute are being properly accounted for and are being used for the intended purpose of advertising and marketing the Basecamp Fitness brand.