What discount rate is applied when calculating the early payoff amount for a Basecamp Fitness agreement?

According to Basecamp Fitness's 2025 Franchise Disclosure Document, if a franchisee has not defaulted on their agreement, they may be allowed to pay off the agreement early. The early payoff amount is calculated by summing all remaining unpaid rental payments, discounting them to their net present value at a rate of up to 5%, and adding the purchase option price.

This means that Basecamp Fitness franchisees have the option to potentially reduce their overall financial obligation by paying off their agreement ahead of schedule. The discount rate, capped at 5%, effectively lowers the total amount due compared to paying each rental payment over time. The exact discount applied is 'up to' 5%, so it is not guaranteed to be a full 5% reduction.

However, this option is only available if the franchisee is not in default. Defaulting on the agreement would likely void this early payoff option, and the franchisee would be subject to other penalties and remedies as outlined in the franchise agreement. Prospective franchisees should clarify with Basecamp Fitness the specific conditions under which the discount rate is applied and how the net present value is calculated to fully understand the potential savings and requirements for early payoff.