What does Basecamp Fitness management believe about the reasonableness of the estimates used in preparing the consolidated financial statements?

According to Basecamp Fitness's 2025 Franchise Disclosure Document, the company's management believes that the estimates and assumptions they have made are reasonable when preparing the consolidated financial statements. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses during the reporting period. The company regularly assesses these estimates, and while actual results could differ from the estimates, management stands by their reasonableness.

This statement is important for prospective franchisees because financial statements rely on numerous estimates. These estimates can significantly impact the reported financial position and performance of Basecamp Fitness. Examples of such estimates include revenue recognition, expense accruals, and asset valuations. If these estimates are not reasonable, the financial statements may not accurately reflect the true financial condition of the company.

While management believes their estimates are reasonable, the FDD also acknowledges that actual results could differ. This inherent uncertainty is a standard disclaimer in financial reporting. Prospective franchisees should understand that past financial performance, as presented in the financial statements, is not necessarily indicative of future results due to these potential variations. It is advisable for potential franchisees to consult with a financial advisor to review and interpret these financial statements, considering the estimates and assumptions involved.