When does the obligation to pay the Royalty Fee begin for a Basecamp Fitness franchise?
Basecamp_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
- A. Monthly Royalty Fee. On or about the 10th day of the month for the prior month, you will pay to us a non-refundable monthly royalty payment (the "Royalty Fee") equal to eight percent (8%) of the Gross Revenues generated in the preceding month by your Basecamp Studio.
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- Your obligation to pay us the Royalty Fee under the terms of this Agreement will begin on the date you open your Basecamp Studio. Your obligation to pay the Royalty Fee will remain in full force and effect throughout the term of this Agreement.
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- "Gross Revenues," shall mean the total amount of revenues generated from all business activities taking place by, through or at the Basecamp Studio, in the form of cash or credit, plus the fair market value of products delivered and services rendered to you, or to your designee, in consideration for products and services provided in, from, or in conjunction with your Basecamp Studio. There will be excluded from "Gross Revenues" bona fide refunds, credits given or allowed to members and other customers for the return of merchandise and amounts collected from members and other customers and remitted by you to any governmental taxing authority in satisfaction of sales taxes, however, chargebacks are not deducted from the calculation of Gross Revenues.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Basecamp Fitness's 2025 Franchise Disclosure Document, the obligation to pay the Royalty Fee begins on the date the franchisee opens their Basecamp Studio. This obligation remains in effect for the entire term of the Franchise Agreement.
The Royalty Fee is a recurring monthly payment, calculated as eight percent (8%) of the Gross Revenues generated by the Basecamp Studio in the preceding month. This fee is due on or about the 10th day of each month and is non-refundable. Gross Revenues include all revenues from business activities at the studio, whether in cash, credit, or fair market value of products and services.
It is important to note that certain items are excluded from Gross Revenues when calculating the Royalty Fee. These exclusions include bona fide refunds, credits given to members or customers for returned merchandise, and sales taxes collected and remitted to governmental taxing authorities. However, chargebacks are not deducted from Gross Revenues. This means that any fees reversed due to customer disputes are still included in the revenue calculation for royalty purposes.
For a prospective Basecamp Fitness franchisee, this means that royalty payments will commence as soon as the studio opens and will continue throughout the franchise term. Accurately tracking and reporting Gross Revenues is crucial, as these figures directly impact the royalty payments owed to Basecamp Fitness. Franchisees should also be aware of what constitutes Gross Revenues and what deductions are permitted to ensure accurate royalty calculations.