If Basecamp Fitness exercises its option to purchase my business, how is the purchase price determined?

According to Basecamp Fitness's 2025 Franchise Disclosure Document, Basecamp Fitness has the option to purchase a franchisee's business. Specifically, Basecamp Fitness can purchase all or a portion of the assets of your Basecamp Studio and take over the assignment of your leases. This option is available to Basecamp Fitness upon the termination or expiration without renewal of your Franchise Agreement. The purchase price for the assets will be their book value at the time of purchase.

This arrangement is relatively common in franchising, particularly when the franchise agreement is ending. It allows Basecamp Fitness to maintain control over the location and potentially continue operations without interruption. For a franchisee, this means that the value they receive for their business may be limited to the book value of the assets, which may or may not reflect the true market value or the business's potential.

Prospective franchisees should carefully consider the implications of this clause. Understanding how 'book value' is defined and calculated is crucial. It would be prudent to discuss with Basecamp Fitness how they typically assess book value in these situations and what factors might influence that valuation. A franchisee might also want to seek independent legal and financial advice to fully understand their rights and options in the event of a non-renewal and potential purchase by Basecamp Fitness.