Does Basecamp Fitness guarantee any financial obligations incurred by franchisees?
Basecamp_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
udes an agreement to be bound by the confidentiality and noncompete provisions of the Franchise Agreement.
ITEM 10 FINANCING
We do not offer, directly or indirectly, any financing to you to help you establish your business. Except as noted below, we do not guarantee any note, lease or other obligation you incur. However, we do have an arrangement with a third-party equipment lender who will provide financing to our franchisees who meet this lender's requirements.
- Geneva Capital, LLC ("Geneva"), offers financing of up to $125,000 for a new location, including, among others, tangible equipment, security system, and signage (but excluding your initial franchise fee and working capital), based on credit approval. Financing is offered as a lease that typically requires 1 advance payment of up to 20%. Geneva also collects a security deposit equal to 1 month's lease payment. Lease terms vary from 12 to 36 months. Geneva offers both true tax and capital leases.
Source: Item 10 — FINANCING (FDD pages 33–35)
What This Means (2025 FDD)
According to Basecamp Fitness's 2025 Franchise Disclosure Document, Basecamp Fitness does not typically guarantee any financial obligations that a franchisee incurs. However, there are exceptions related to third-party financing through Geneva Capital, LLC. While Basecamp Fitness does not directly guarantee a franchisee's note, lease, or other obligation, they do have an agreement with Geneva where they "agreed to assume certain obligations if you default under your lease, including an obligation to assist Geneva in remarketing your equipment" and "agreed to establish a pool to compensate Geneva for certain amounts of the losses it incurs, and to guaranty payment of certain amounts of those losses."
This arrangement with Geneva Capital means that while Basecamp Fitness isn't directly guaranteeing a franchisee's lease, they have a financial stake in ensuring the lease is fulfilled. This is further supported by the fact that Basecamp Fitness receives 1.5% of the lease amount as a referral fee and an additional 1.5% of the lease amount is added to the guaranty pool. This indirect guarantee and referral fee structure is not uncommon in franchising, as franchisors often have relationships with preferred lenders to facilitate financing for their franchisees.
Prospective franchisees should be aware that while Basecamp Fitness assists in facilitating financing and provides some level of guarantee to Geneva Capital, the franchisee is still ultimately responsible for their financial obligations. The franchisee will likely need to provide a personal guarantee to Geneva Capital, and defaulting on the lease can have significant financial and legal consequences, as detailed in the equipment lease agreement. Franchisees should carefully review the terms of any financing agreement and understand their obligations before signing.