Does Basecamp Fitness get a security interest in my receivables and equipment?

According to Basecamp Fitness's 2025 Franchise Disclosure Document, Basecamp Fitness is authorized to file one or more financing statements to evidence a security interest. This means that Basecamp Fitness can claim your business assets, such as equipment and receivables, as collateral. This gives Basecamp Fitness a legal claim against these assets if you fail to meet your financial obligations to them.

However, Basecamp Fitness will subordinate their first priority interest to a lending institution that provides you financing for your Basecamp Studio. This indicates that if you take out a loan from a bank or other lender to finance your Basecamp Fitness studio, that lender will have priority over Basecamp Fitness's security interest. This subordination makes it easier for franchisees to obtain financing, as lenders are more willing to provide loans when they have the primary claim on the assets.

This arrangement is relatively common in franchising. It allows the franchisor to protect its interests while still enabling franchisees to secure necessary funding. Prospective franchisees should understand the implications of a security interest and how it might affect their ability to manage their assets and finances. It is advisable to consult with a legal and financial advisor to fully understand the terms and conditions related to the security interest and subordination agreement.