What happens if a Basecamp Fitness franchisee fails to meet the standards of quality and service?

of the day-to-day operation of your Basecamp Studio and for the terms of employment for your employees.

• 1. You acknowledge that the mandatory standards, specifications and policies we establish are not aimed at the day-to-day operation of your Basecamp Studio, which will solely be within your control, but are merely intended to preserve the goodwill of the System and Marks.
• 1. Periodically, as we deem appropriate, a representative of ours may visit your Basecamp Studio to ensure compliance with our required standards, specifications and procedures. You will allow our representative to inspect the condition and operation of your Basecamp Studio and all areas of your Basecamp Studio at any time during your business hours. Such inspections may include, without limitation, conducting any type of audit or review necessary to evaluate your compliance with all required payments, standards, specifications or procedures.
  • a. We will provide you a copy of the report at your request. If your Basecamp Studio does not receive a passing score from a visit, a new inspection will be conducted. This process will be repeated until you have received a passing score. At our option, and in addition to any other rights we may have, you must pay us a failed inspection fee we establish for each failed inspection to defer any costs we incur in re-inspecting your Basecamp Studio after the first inspection. This fee will be payable in the manner we specify.
  • b. We may, from time to time, make suggestions and give mandatory instructions with respect to your operation of your Basecamp Studio, as we consider necessary or appropriate to ensure compliance with the thencurrent quality standards of the System and to protect the goodwill and image of the System.
  • c. You expressly agree that these visits will not imply that you are in compliance with your obligations under this Agreement or under the law or that we waive our right to require strict compliance with the terms of this Agreement or the Manual. Furthermore, these visits will not create any responsibility or liability on our part.
  • d. If you request that we make additional visits to your Basecamp Studio, you will pay the fees we establish for those visits.
• 1. If you fail to maintain the premises of your Basecamp Studio in a condition that satisfies our reasonable requirements, or if you otherwise fail to comply with any provision of this Agreement, we may, upon not less than three (3) days' notice to you, order or accomplish the cleaning of the premises, and/or designate one of our representatives to assist you in fulfilling your obligations under this Agreement, and you will be responsible to pay us for all costs we incur in doing so and all fees we set for providing assistance to you. However, our action in exercising this option does not relieve you from your obligation to properly maintain the premises of your Basecamp Studio and to comply with the terms of this Agreement, each of which shall be your sole responsibility.

Source: Item 22 — CONTRACTS (FDD pages 61–62)