What interest rate do advances under the Liquidity Reserve Notes bear for Basecamp Fitness?

According to Basecamp Fitness's 2025 Franchise Disclosure Document, advances under the Liquidity Reserve Notes bear interest at the Prime Rate plus 3.00%. These notes are also subject to certain commitment fees related to the unutilized portion of investor commitments. As of December 31, 2024, and 2023, there were no outstanding borrowings against the Liquidity Reserve Notes.

For a prospective Basecamp Fitness franchisee, this means that if the company needs to draw on these Liquidity Reserve Notes, the interest rate will be based on the prevailing Prime Rate at that time, plus an additional 3.00%. The Prime Rate is a benchmark interest rate that banks use, so the actual rate could fluctuate over time. Additionally, franchisees should be aware of potential commitment fees on any unutilized amounts, which could add to the overall cost.

It's important to note that while the document specifies the interest rate and commitment fees, it does not detail the specific circumstances under which these Liquidity Reserve Notes would be utilized. A potential franchisee should inquire with Basecamp Fitness about the conditions that would trigger the use of these notes and how they might impact the financial stability of the franchise system.