What right does Basecamp Fitness have regarding a proposed transfer of a franchise?
Basecamp_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
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Conditions to Your Transfer or Assignment.
This Agreement, and your rights and obligations under it, are and will remain personal to you.
As used in this Agreement, the term "Transfer" will mean any sale, lease, assignment, gift, pledge, mortgage or any other encumbrance, transfer by bankruptcy, transfer by your disability or death or by judicial order, merger, consolidation, share exchange, transfer by operation of law or otherwise, whether direct or indirect, voluntary or involuntary, of this Agreement or any interest in it, or any rights or obligations arising under it, or of any material portion of your assets used to operate your Basecamp Studio, or of any interest in you, or if you are a corporation, partnership, limited liability company or other entity, a transfer, pledge, assignment, or other disposition of direct or indirect control or ownership of fifty percent (50%) or more of any interest in your entity.
In addition, if there are two (2) individuals signing this Agreement as Franchisee, and one (1) of those individuals is no longer involved in the ownership of your Basecamp Studio, the withdrawal of that person will be considered a "Transfer." A "Transfer" will also be deemed to occur when there are more than two (2) people listed as the Franchisee and there is a change in the ownership of your Basecamp Studio such that less than a majority of the original signators continue to have a majority interest in the equity of the business.
You (and your shareholders, partners and members) will not directly or indirectly make a Transfer without our prior written consent and any transfer shall be subject to our right of first refusal, as set forth in Section 19 below.
Unless otherwise provided in this Agreement, we will not unreasonably withhold, delay or condition our consent to a Transfer, subject to all of the following conditions being satisfied:
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- you are in full compliance with this Agreement, you have no uncured defaults, and all your debts and financial obligations to us and our affiliates are current;
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- you provide us with all information we may require concerning the proposed transaction (including a copy of the purchase agreement and all related documents), and the proposed transferee;
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Basecamp Fitness's 2025 Franchise Disclosure Document, the franchise agreement and the rights and obligations within it are personal to the franchisee. Basecamp Fitness defines "Transfer" broadly, including not only sales and assignments but also pledges, mortgages, transfers due to bankruptcy, disability, death, or judicial order, mergers, consolidations, or any disposition of 50% or more of the ownership interest in the franchisee's entity. Even the withdrawal of one of two original franchisees is considered a transfer.
Basecamp Fitness requires the franchisee to obtain prior written consent before any transfer can occur, and any transfer is subject to Basecamp Fitness's right of first refusal. Basecamp Fitness states that it will not unreasonably withhold, delay, or condition its consent, provided certain conditions are met.
These conditions include the franchisee being in full compliance with the franchise agreement, having no uncured defaults, and being current on all debts and financial obligations to Basecamp Fitness and its affiliates. The franchisee must also provide Basecamp Fitness with all required information about the proposed transaction, including the purchase agreement and details about the proposed transferee. This ensures Basecamp Fitness maintains control over who enters their franchise system and that the new franchisee meets their standards.