What constitutes an unauthorized transfer under the Basecamp Fitness agreement?
Basecamp_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
As used in this Agreement, the term "Transfer" will mean any sale, lease, assignment, gift, pledge, mortgage or any other encumbrance, transfer by bankruptcy, transfer by your disability or death or by judicial order, merger, consolidation, share exchange, transfer by operation of law or otherwise, whether direct or indirect, voluntary or involuntary, of this Agreement or any interest in it, or any rights or obligations arising under it, or of any material portion of your assets used to operate your Basecamp Studio, or of any interest in you, or if you are a corporation, partnership, limited liability company or other entity, a transfer, pledge, assignment, or other disposition of direct or indirect control or ownership of fifty percent (50%) or more of any interest in your entity.
In addition, if there are two (2) individuals signing this Agreement as Franchisee, and one (1) of those individuals is no longer involved in the ownership of your Basecamp Studio, the withdrawal of that person will be considered a "Transfer." A "Transfer" will also be deemed to occur when there are more than two (2) people listed as the Franchisee and there is a change in the ownership of your Basecamp Studio such that less than a majority of the original signators continue to have a majority interest in the equity of the business.
You (and your shareholders, partners and members) will not directly or indirectly make a Transfer without our prior written consent and any transfer shall be subject to our right of first refusal, as set forth in Section 19 below.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Basecamp Fitness's 2025 Franchise Disclosure Document, a "Transfer" includes any sale, lease, assignment, gift, pledge, mortgage, or any other encumbrance. This also covers transfers related to bankruptcy, disability, death, judicial order, merger, consolidation, share exchange, operation of law, or any other direct or indirect, voluntary or involuntary transfer of the agreement. This definition extends to any interest in the agreement, rights, obligations, or any material portion of the franchisee's assets used to operate the Basecamp Fitness studio. It also encompasses any interest in the franchisee or, if the franchisee is a business entity, a transfer, pledge, assignment, or other disposition of direct or indirect control or ownership of 50% or more of any interest in the entity.
For franchisees with two individuals signing the agreement, the withdrawal of one person from ownership is considered a "Transfer." If there are more than two individuals listed as franchisees, a change in ownership where less than a majority of the original signatories continue to hold a majority interest in the business's equity also constitutes a "Transfer." Any direct or indirect transfer made without Basecamp Fitness's prior written consent is prohibited, and all transfers are subject to Basecamp Fitness's right of first refusal.
These restrictions are significant for prospective franchisees because they limit the franchisee's ability to sell, assign, or otherwise transfer their franchise without the franchisor's approval. Basecamp Fitness retains considerable control over who can become a franchisee and ensures that any new owner meets their standards. The right of first refusal allows Basecamp Fitness to purchase the franchise before it is sold to a third party, giving them the option to maintain control over the location or find a more suitable franchisee. Franchisees need to be aware of these conditions, as unauthorized transfers can lead to termination of the franchise agreement.