What is the franchisee's responsibility regarding the eligibility of funds for transfer/rollover into the iFinance Plan when opening a Basecamp Fitness franchise?
Basecamp_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
Investing your retirement savings into a small business can be a prudent strategy for achieving your retirement goals. Guidant Financial is dedicated to ensuring that Guidant's iFinance meets all applicable regulations for a Rollover for Business
Please review each statement and verify your understanding of the specific actions you must take when utilizing a Rollover for Business Start-ups plan such as Guidant's iFinance.
FIDUCIARY OBLIGATIONS:
To benefit from the tax-deferred advantages of a qualified retirement account, regulations require that you choose investments that are in the best interest of your retirement account.
I verify that I have performed due diligence and believe that my decision to invest my personal retirement funds into the corporation is a good investment in the best interest of my 401(k).
I verify my understanding that I could lose up to 100% of my investment if the business falls.
I have done my own due diligence and have determined that the use of my retirement monies as funding source for iFinance and related business transaction is a prudent use of my retirement monies and is a good investment for the
401(k) PLAN RESPONSIBILITIES:
As the trustee of a 401(k) plan, you have a duty to manage the plan so that it benefits all employees not just the owners and officers of the Corporation.
I verify that I will use this 401(k) as a long-term savings vehicle for all employees of the business and agree that I will encourage all eligible employees to participate.
I verify my understanding that when company stock is offered for purchase within the 401(k) plan, the offering must be available for all eligible employees.
PERSONAL SALARY/COMPENSATION CONSIDERATIONS:
To avoid any appearance of a conflict-of-interest with your 401(k) investment, you must defer paying yourself compensation until the company becomes an active business.
I verify that I will not draw compensation from the company before being opened for business; the company must be actively engaged in the buying or selling of goods and/or services.
I verify my understanding that my compensation should come from revenue generated from the business and not from the proceeds of the sale of employer stock to the 401(k).
Source: Item 23 — RECEIPTS (FDD pages 62–248)
What This Means (2025 FDD)
According to Basecamp Fitness's 2025 Franchise Disclosure Document, franchisees considering using a Rollover for Business Start-ups plan, such as Guidant's iFinance, must understand and verify specific actions to ensure compliance with regulations. These regulations are in place to maintain the tax-deferred advantages of qualified retirement accounts, requiring that investments are in the best interest of the retirement account.
Specifically, the franchisee must perform due diligence and believe that investing personal retirement funds into the corporation is a sound investment for their 401(k). They must also acknowledge the risk of potentially losing up to 100% of their investment if the Basecamp Fitness business fails. Furthermore, as a trustee of a 401(k) plan, the franchisee has a duty to manage the plan to benefit all employees, not just the owners and officers, and must encourage all eligible employees to participate in the 401(k) plan. If company stock is offered for purchase within the 401(k) plan, the offering must be available for all eligible employees.
To avoid any conflict of interest with the 401(k) investment, the franchisee must defer paying themselves compensation until the Basecamp Fitness studio is actively engaged in buying or selling goods and/or services. Compensation should come from revenue generated by the business, not from the proceeds of selling employer stock to the 401(k). These measures ensure that the franchisee understands their fiduciary responsibilities and the potential risks and obligations associated with using retirement funds to finance their Basecamp Fitness franchise.