How does Basecamp Fitness determine when accounts receivable are considered past due?
Basecamp_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
(in thousands of US dollars)*
investments available for current use with an initial maturity of three months or less to be cash and cash equivalents.
Restricted Cash
Restricted cash consists of franchisee contributions held in a general advertising and marketing fund. The use of the cash is restricted to advertising and marketing expenditures, as defined. Restricted cash has been combined with cash and cash equivalents when reconciling the beginning and end of period balances in the consolidated statements of cash flows.
Accounts Receivable and Allowance for Credit Losses
Accounts receivable consists primarily of franchi
Source: Item 23 — RECEIPTS (FDD pages 62–248)
What This Means (2025 FDD)
According to Basecamp Fitness's 2025 Franchise Disclosure Document, accounts receivable, which primarily consist of franchise fees, royalty fees, and trade receivables, are considered past due if any portion of the balance remains unpaid beyond the due date established by Basecamp Fitness. This policy is part of Basecamp Fitness's broader approach to managing its accounts receivable, which also includes reviewing outstanding balances at year-end to account for potential losses.
Basecamp Fitness's management reviews outstanding accounts receivable at the end of each year to account for expected losses and past bad debt expenses. If necessary, they establish an allowance for credit losses to cover uncollectible amounts. For example, the allowance for credit losses was $1,801 and $165 for the years ending December 31, 2024, and 2023, respectively. This indicates that Basecamp Fitness actively monitors and adjusts its financial records to reflect the reality of potential uncollectible debts.
For a prospective franchisee, understanding when accounts receivable are considered past due is crucial for managing their own financial obligations to Basecamp Fitness. Franchisees should ensure they are aware of the specific due dates for franchise fees, royalty fees, and other trade receivables to avoid being considered past due and potentially incurring late fees or other penalties. It is also important for franchisees to understand how Basecamp Fitness handles uncollectible amounts, as this can provide insight into the financial stability and risk management practices of the franchisor.