How is Basecamp Fitness treated for income tax purposes?
Basecamp_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company is treated as a single member limited liability company (LLC) that is treated as a disregarded entity for tax purposes. As such, the Company's income, losses, and credits are included in the income tax returns of Purpose Brands Holdings LLC.
The Company has evaluated its tax positions and related income tax under the Financial Accounting Standards Board's (FASB) authoritative guidance Accounting for Income Taxes. Management believes that since the Company is taxed as an LLC, there is not a significant impact on the Company as a result of implementing this standard. Therefore, no provision or liability for federal or state income taxes has been included in these financial statements. A provision has been made, however, for state minimum fees and other state taxes which are applicable to all entities.
The Company recognizes the effect of uncertain income tax positions only if those positions are more likely than not of being sustained. The Company is not currently under examination by any taxing jurisdiction and management believes there are no uncertain income tax positions taken which would require the Company to reflect a liability for unrecognized tax positions. The periods subject to examination are tax years subsequent to 2020. In the event of any future penalties or interest, the Company has elected to record interest and penalties as income tax expense on the Company's consolidated statements of comprehensive income. The
Source: Item 23 — RECEIPTS (FDD pages 62–248)
What This Means (2025 FDD)
According to Basecamp Fitness's 2025 Franchise Disclosure Document, the company is treated as a single member limited liability company (LLC) and is considered a disregarded entity for tax purposes. This means that Basecamp Fitness's income, losses, and credits are included in the income tax returns of its parent company, Purpose Brands Holdings LLC.
Because Basecamp Fitness is taxed as an LLC, management believes that implementing the Financial Accounting Standards Board's (FASB) authoritative guidance Accounting for Income Taxes does not have a significant impact on the company. Consequently, the financial statements do not include any provision or liability for federal or state income taxes, except for state minimum fees and other state taxes applicable to all entities.
Basecamp Fitness recognizes the effect of uncertain income tax positions only if those positions are more likely than not of being sustained. As of the issuance date of the FDD, Basecamp Fitness is not under examination by any taxing jurisdiction, and management believes there are no uncertain income tax positions that would require the company to reflect a liability for unrecognized tax positions. The periods subject to examination are tax years subsequent to 2020. In the event of any future penalties or interest, Basecamp Fitness has elected to record interest and penalties as income tax expense on the company's consolidated statements of comprehensive income.