What is the purpose of the franchise capital accounts established by Basecamp Fitness?
Basecamp_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company established franchise capital accounts in which the Company maintains funds necessary to either provide a guarantee for franchising subsidiaries or to support any franchisor liquidity or net worth requirement, including in respect of eligibility for any exemptions applicable to franchisors or licensors of franchises under the applicable franchise laws. The Company may accept receipt of unrestricted funds credited to such franchise capital account by Anytime Fitness, LLC, deposit to the franchise capital account the proceeds of capital contributions made to such account, and disburse funds from the franchise capital account to fund any loan or advance made in accordance with the base indenture.
Source: Item 23 — RECEIPTS (FDD pages 62–248)
What This Means (2025 FDD)
According to Basecamp Fitness's 2025 Franchise Disclosure Document, the company establishes franchise capital accounts to maintain funds necessary to provide a guarantee for franchising subsidiaries. These accounts also support any franchisor liquidity or net worth requirements. This includes eligibility for any exemptions applicable to franchisors or licensors of franchises under the applicable franchise laws.
Funds may be deposited into the franchise capital account by Anytime Fitness, LLC, from capital contributions, or disbursed to fund any loan or advance made in accordance with the base indenture. SEB Franchising Guarantor LLC guarantees the obligations of franchising subsidiaries including Anytime Fitness Franchisor LLC, OTF Franchisor LLC, Basecamp Fitness Franchisor LLC, The Bar Method Franchisor LLC and Waxing the City Franchisor LLC.
For a prospective Basecamp Fitness franchisee, this means that a portion of the fees and other payments made to the franchisor may be held in these capital accounts. These funds are used to ensure that Basecamp Fitness meets its financial obligations and can continue to support its franchisees. It also provides a level of financial security, as the funds can be used to cover guarantees or loans if needed. Franchisees should review the financial statements and related exhibits to understand how these accounts are managed and how they might impact the overall financial health of the franchise system.