For Basecamp Fitness, what is the restricted cash used for?

According to Basecamp Fitness's 2025 Franchise Disclosure Document, restricted cash consists of franchisee contributions held in a general advertising and marketing fund. The use of this cash is specifically limited to advertising and marketing expenditures, as defined by Basecamp Fitness. This means that a portion of the fees paid by franchisees is pooled together and can only be used for promoting the Basecamp Fitness brand and attracting customers.

This arrangement is common in franchising, as it allows for coordinated marketing efforts that benefit all franchisees. By pooling resources, Basecamp Fitness can undertake larger and more effective advertising campaigns than individual franchisees could manage on their own. The FDD indicates that the restricted cash is combined with cash and cash equivalents when reconciling balances in the consolidated statements of cash flows.

For a prospective Basecamp Fitness franchisee, this means that a portion of their ongoing fees will be directed towards a dedicated advertising fund, which is intended to support the growth and visibility of the brand. It is important for potential franchisees to understand how these funds are managed and what types of advertising and marketing activities are supported. Franchisees may want to inquire about the specific details of the advertising and marketing plans, as well as the level of input franchisees have in the allocation of these funds.

Additionally, the FDD mentions an advertising fund where the company collects advertising fees from franchisees for marketing, advertising, and related programs. The use of these funds is restricted to advertising, product development, public relations, and administrative expenses. This fund also includes fees collected from franchisees related to continuing engagement credits, which are used by the company at its discretion for the Anytime Fitness brand and its franchisees. Understanding the specifics of both the restricted cash and the advertising fund can help a franchisee assess the value and transparency of Basecamp Fitness's marketing efforts.