What happens to the rights granted to a Basecamp Fitness franchisee upon termination or expiration of the Franchise Agreement?
Basecamp_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
default); or (x) we have delivered to you or any of your affiliates a notice of termination of a Franchise Agreement in accordance with its terms and conditions.
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- Rights and Duties of Parties Upon Termination or Expiration. Upon termination or expiration of this Agreement, all rights granted to you under this Agreement will automatically terminate, and:
- A. All remaining rights granted to you to develop Basecamp Fitness Studios under this Agreement will automatically be revoked and will be null and void and shall revert to us. You will not be entitled to any refund of any fees.
- B. You and your affiliates must within five (5) business days of the termination or expiration pay all sums owing to us and our affiliates. In addition, you agree to pay as fair and reasonable liquidated damages (but not as a penalty) an amount equal to Ten Thousand Dollars ($10,000) for each undeveloped Basecamp Studio. You agree that this amount is in addition to the Development Fee paid under this Agreement, and is for lost revenues from Royalty Fees (as defined in the Franchise Agreement) and other amounts payable to us, including the fact that you were holding the development rights for those Basecamp Studios and precluding the development of certain Basecamp Fitness studios in the Development Territory, and that it would be difficult to calculate with certainty the amount of damage we will incur. Notwithstanding your agreement, if a court determines that this liquidated damages payment is unenforceable, then we may pursue all other available remedies, including consequential damages.
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- Ownership/Transfer. The following provisions govern any transfer:
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- A.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 51–55)
What This Means (2025 FDD)
According to Basecamp Fitness's 2025 Franchise Disclosure Document, upon termination or expiration of the Franchise Agreement, all rights granted to the franchisee under the agreement automatically terminate. This means the franchisee can no longer operate as a Basecamp Fitness studio. All remaining rights to develop Basecamp Fitness studios are revoked, becoming null and void and reverting back to the franchisor. The franchisee is not entitled to any refund of fees paid.
Within five business days of termination or expiration, the franchisee must pay all sums owed to Basecamp Fitness and its affiliates. Additionally, the franchisee agrees to pay $10,000 as liquidated damages for each undeveloped Basecamp Studio. This amount is in addition to the Development Fee and is intended to cover lost revenues from Royalty Fees and other amounts payable to Basecamp Fitness, as well as the impact of the franchisee holding development rights and precluding other potential development in the Development Territory.
This liquidated damages clause acknowledges the difficulty in precisely calculating the damages Basecamp Fitness would incur due to the termination. However, if a court deems this liquidated damages payment unenforceable, Basecamp Fitness reserves the right to pursue all other available remedies, including consequential damages. This could potentially expose the franchisee to significantly higher financial liabilities depending on the actual damages proven by Basecamp Fitness.