What is the purpose of the Purpose Brands Securitization Entities in relation to Basecamp Fitness franchising?
Basecamp_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
re under common control, the contributions were recorded at book value. The net book value of the assets and liabilities contributed are summarized below as of April 2, 2024:
| Cash and cash equivalents | $ 2,172 |
|---|---|
| Accounts receivable | 6,389 |
| Inventory | 2,591 |
| Prepaid expenses and other assets | 5,956 |
| Deferred costs | 8,245 |
| Intangible assets and software development costs | 8,592 |
| Accounts payable | (3,497) |
| Accrued expenses and other current liabilities | (4,118) |
| Deferred revenue | (27,689) |
| Net liabilities contributed | $ (1,359) |
The Issuer, its direct parent, as well as the Issuer's direct and indirect subsidiaries, except SEB Franchising Guarantor LLC, (collectively, the Purpose Brands Securitization Entities) hold substantially all of the franchising-related assets and have jointly and severally guaranteed the payment of each series of notes and the payment and performance of all other obligations of the Issuer.
Anytime Fitness, LLC manages and services the assets of the Purpose Brands Securitization Entities in return for a management fee under a management agreement (the "Securitization Management Agreement"). The primary responsibilities of Anytime Fitness, LLC as the manager are to administer collections of royalties and other securitized revenues and perform certain franchising, operational, intellectual property and reporting on behalf of the Purpose Brands Securitization Entities with respect to the managed assets.
Series 2021-1 Notes
In connection with the securitization transaction completed on November 24, 2021 (see "Securitization" section), the Issuer issued $485,000 of Series 2021-1 Class A-2 Fixed Rate Senior Secured Notes ("Series 2021- 1 Class A-2 Notes"). In addition
Source: Item 23 — RECEIPTS (FDD pages 62–248)
What This Means (2025 FDD)
According to Basecamp Fitness's 2025 Franchise Disclosure Document, the Purpose Brands Securitization Entities play a significant role in the financial structure of the franchise system. These entities, which include the Issuer (SEB Funding LLC) and its subsidiaries (excluding SEB Franchising Guarantor LLC), collectively hold the franchising-related assets for brands like Basecamp Fitness. This means that assets such as franchise agreements, royalty streams, and other revenue-generating components are under their umbrella.
The primary purpose of these entities is to secure debt through securitization. Specifically, they jointly and severally guarantee the payment of notes and other obligations of the Issuer. In 2021, the Issuer issued $485,000 in Series 2021-1 Class A-2 Fixed Rate Senior Secured Notes, along with additional notes, totaling $26,100. These notes are secured by substantially all the assets of, and guaranteed by, the Purpose Brands Securitization Entities. This financial structure allows the parent company, Purpose Brands, to raise capital using the assets and revenue streams from its franchise operations, including Basecamp Fitness.
Anytime Fitness, LLC, manages and services the assets of the Purpose Brands Securitization Entities under a management agreement. Their responsibilities include administering the collection of royalties and other securitized revenues, as well as handling franchising, operational, intellectual property, and reporting tasks on behalf of the securitization entities. For a prospective Basecamp Fitness franchisee, this means that a portion of their royalty payments and other fees contribute to the assets backing these securitized notes. While this structure is primarily for the benefit of the franchisor and its parent company, understanding it can provide franchisees with insight into the financial stability and operations of the overall franchise system.