Under what circumstances is a Basecamp Fitness franchisee prohibited from transferring their rights or obligations?
Basecamp_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
| Section in | |||
|---|---|---|---|
| Franchise or Other | |||
| Provision | Agreements | Summary | |
| i. | Your obligations on termination/non-renewal | Section 16 – Franchise Agreement Section 6 – Area Development Agreement | Stop operating the Basecamp Studio, stop using our names and marks, return information to us, assign to us or cancel certain registrations, listings, telephone numbers, websites and domain names, and pay all amounts you owe us, comply with your obligations if we exercise our purchase option. You lose all remaining rights to develop Basecamp Studios. |
| j. | Assignment of contract by us | Section 13.A – Franchise Agreement and Section 7.A – Area Development Agreement | No restriction on our right to assign. |
| k. "Transfer" by you – defined | Section 13.B – Franchise Agreement and Section 7.C – Area Development Agreement | Includes transfer of contract or business, or transfer of majority control of the Franchise Agreement or of the business. | |
| l. | Our approval of transfer by franchisee | Section 13.B – Franchise Agreement Section 7.C – Area Development Agreement | We have the right to approve all transfers, but will not withhold our consent if all of the requirements for the transfer are met. We have the right to approve, but you may not transfer only a portion of your rights. |
| m. Conditions for our approval of transfer | Section 13.B – Franchise Agreement Section 7.C – Area Development Agreement | Conditions include: (i) You must be in compliance with the Franchise Agreement and provide us with all information we require regarding the proposed transaction; (ii) transferee must meet our requirements and sign a new franchise agreement on our then-current form for the remaining term of your agreement (which may contain materially different terms and conditions then in your agreement, but we will not require the transferee to pay us a new initial franchise fee.); (iii) payment of any broker fees or commissions and you must also pay a transfer fee and sign a release (subject to state law); (iv) transferee must agree to perform any maintenance, remodeling and re-equipping of your Basecamp Studio that we deem necessary; and (v) transferee's Principal Operator must successfully complete all required training. You must meet any additional conditions we specify in the Operations Manual or otherwise in writing. You must sign franchise agreements for all remaining Basecamp Studios you are permitted to develop, and you must transfer those agreements to the same person or entity to whom you are transferring the Area Development Agreement. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 51–55)
What This Means (2025 FDD)
According to Basecamp Fitness's 2025 Franchise Disclosure Document, a franchisee's ability to transfer their rights and obligations is subject to certain conditions. Basecamp Fitness retains the right to approve all transfers, and consent will not be granted unless specific requirements are met.
These conditions include the franchisee being in compliance with the Franchise Agreement and providing all necessary information regarding the proposed transaction. The transferee must also meet Basecamp Fitness's requirements and sign the then-current franchise agreement, which may contain different terms than the original agreement. The transferee is not required to pay a new initial franchise fee.
Additionally, the franchisee must cover any broker fees or commissions, pay a transfer fee, and sign a release. The transferee must also agree to perform any necessary maintenance, remodeling, or re-equipping of the Basecamp Studio as deemed necessary by Basecamp Fitness. The transferee's Principal Operator must also successfully complete all required training. The franchisee must also meet any additional conditions specified in the Operations Manual or in writing. If the franchisee has multiple Basecamp Studios under an Area Development Agreement, they must transfer all of those agreements to the same person or entity.
Furthermore, if the transferee is a corporation, limited liability company, or partnership, all shareholders, members, or partners must enter into a written agreement guaranteeing the transferee's obligations and agreeing to be personally bound by all covenants and restrictions. Contemporaneously with the transfer, the franchisee must also fulfill certain obligations.