If a Basecamp Fitness franchisee transfers their agreement, are they still bound by post-termination provisions?
Basecamp_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
| In consideration of the agreement of BASECAMP FITNESS FRANCHISOR LLC ("Franchisor") to allow ("Franchisee") to [RENEW OR TRANSFER] its Franchise Agreement dated between Franchisee and Franchisor ("Agreement"), Franchisee hereby releases and forever discharges Franchisor, and its affiliates, as well as their current or former members, directors, officers, employees and agents, in their corporate and individual capacities, and their respective heirs, personal representatives, successors and assigns, from any and all claims Franchisee may have against such parties known and unknown, foreseen and unforeseen, from the beginning of time to the date hereof, whether in law or in equity, including, but not limited to, any claims arising out of the offer or sale of any franchise to Franchisee, and any matters arising under the Agreement or under any other agreement between Franchisee and Franchisor or its affiliates. |
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| The general release does not apply with respect to claims arising under the Washington Franchise Investment |
| Protection Act, RCW 19.100, and the rules adopted thereunder. |
| [FOR TRANSFERS: Further, Franchisee acknowledges that transfer of the Agreement shall terminate Franchisee's |
| interest in the Agreement, but Franchisee will continue to be bound by all post-termination provisions of the |
| Agreement, including but not limited to the obligations of confidentiality, and the covenant not to compete |
| contained in the Agreement.] |
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Basecamp Fitness's 2025 Franchise Disclosure Document, a franchisee who transfers their agreement remains bound by all post-termination provisions. This includes obligations of confidentiality and the covenant not to compete contained in the agreement. This condition is part of the standard release and acknowledgement that a franchisee must agree to when transferring their franchise.
This means that even after a Basecamp Fitness franchisee sells their business, they must still adhere to the restrictions outlined in the original franchise agreement regarding confidentiality and non-competition. For example, they cannot disclose confidential information about Basecamp Fitness's operations or open a competing fitness studio within a prohibited area.
However, the California Addendum included in the FDD states that the covenant not to compete, which extends beyond the termination of the franchise, may not be enforceable under California law. Therefore, franchisees in California might not be held to the same post-termination non-compete obligations as franchisees in other states. Franchisees should consult with a legal professional to understand the specific implications of these provisions in their state.