Does the Basecamp Fitness owner have liability with respect to the replacement of the equipment?
Basecamp_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
the Agreement were a "finance lease" under Article 2A of the UCC. To the extent permitted by applicable law, Customer hereby waives any and all rights conferred upon a lessee under UCC Article 2A-508 through 336.2A-522 whether o
AND DISCLAIM ANY RELIANCE UPON ANY STATEMENTS OR REPRESENTATIONS MADE BY OWNER. OWNER SHALL HAVE NO LIABILITY FOR THE INSTALLATION OR PERFORMANCE OF THE EQUIPMENT OR TO PERFORM ANY SERVICES, OR WITH RESPECT TO THE SELECTION, INSTALLATION, TESTING, PERFORMANCE, QUALITY, MAINTENANCE, OR SUPPORT OF THE EQUIPMENT. THE SUPPLIER IS NOT AN AGENT OF OWNER'S AND NO REPRESENTATION BY SUPPLIER SHALL IN ANY WAY AFFECT CUSTOMER'S DUTY TO PAY THE RENTAL PAYMENTS AND PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT.
LOSS OR DAMAGE: Customer is responsible for the risk of loss, destruction of, or damage to the Equipment. No such loss or damage relieves Customer from the payment obligations under this Agreement. Customer agrees to promptly notify Owner in writing of any loss or damage and at Owner's discretion either pay to Owner the Accelerated Amount or repair or replace the Equipment so that the Equipment is returned to the condition required herein.
COLLATERAL PROTECTION & INSURANCE: Customer agrees to keep the Equipment fully insured against property damage and/or loss with Geneva Capital, LLC and its Assigns as 8. COLLATERAL PROTECTION & INSURANCE: Customer agrees to keep the Equipment fully insured against property damage and/or loss with Geneva Capital, LLC and its Assigns as Loss Payee in an amount not less than the original Equipment Cost until this Agreement is terminated. Customer also agrees to obtain a $500,000 comprehensive general liability insurance policy and to include Geneva Capital, LLC and its Assigns as an Additional Insured on the policy. Customer agrees to provide Owner with a complete certificate of insurance acceptable to Owner, before this Agreement begins. In the event the acceptable certificate is not received or later lapses, Customer further authorizes Owner as Customer's attorney-in-fact to enroll Customer in an equipment protection program through a third-party insurance provider and Customer agrees to pay a monthly admin
Source: Item 23 — RECEIPTS (FDD pages 62–248)
What This Means (2025 FDD)
According to the 2025 Basecamp Fitness Franchise Disclosure Document, the customer (franchisee) bears significant responsibility for the equipment. Specifically, the franchisee is responsible for the risk of loss, destruction, or damage to the equipment, and these events do not relieve the franchisee of their payment obligations under the agreement.
In the event of loss or damage, the franchisee must promptly notify the owner (likely the lessor or financing company) in writing. The owner then has the discretion to require the franchisee to either pay the Accelerated Amount (likely the remaining lease payments) or repair/replace the equipment to restore it to the required condition. This means a Basecamp Fitness franchisee could face substantial costs for equipment replacement or repair on top of their ongoing lease obligations.
To protect against these risks, the franchisee is required to maintain full insurance coverage against property damage and/or loss, with Geneva Capital, LLC (or its assigns) named as the loss payee. Additionally, the franchisee must obtain a $500,000 comprehensive general liability insurance policy, also including Geneva Capital, LLC as an additional insured. If the franchisee fails to maintain acceptable insurance, the owner is authorized to enroll the franchisee in an equipment protection program, with the franchisee bearing the costs and a monthly administrative surcharge. However, even with insurance, the franchisee remains liable for any balance due under the lease if the insurance proceeds are insufficient to cover the loss. This highlights the importance of adequate insurance coverage and careful equipment handling for Basecamp Fitness franchisees.