Under what condition is the CEC Credit Deficiency fee payable to Basecamp Fitness?
Basecamp_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
olation | As incurred | Payable only if a required report or financial statement is not delivered when due. | | Type of Fee | Amount (Note 1) | Due Date | Remarks | |---------------|---------------------------|--------------|----------------------------------------------| | Insufficient | $100 per check that you | As incurred | | | Funds Fee | submit to us that is returned for insufficient funds, and $100 each time that we are unable to collect via EFT due to insufficient funds. | | | | CEC Credit | $1.00 per credit | Immediately | You only pay this fee if you fail to meet | | Deficiency | deficiency multiplied by | after notice | your Continuing Engagement Credit | | | the number of Basecamp Studios you own | from us | minimum in any given year. We will deposit the fee in the General Advertising and Marketing Fund. See Item 11 for more information. | | Compliance | $250 per additional | As incurred | If you would like additional Compliance | | Drawing Fee | Drawing | | Drawings you must pay this fee to us for each additional Drawing. | | Cleaning Fee | Costs we incur and are charged by third parties | As incurred | Only payable if you fail to maintain your Studio in a condition that meets our standards and we designate one of our personnel to assist you and/or have third party cleaners clean your Studio to bring it up to standards. | | Liquidated | $10,000 multiplied by | Immediately | Only payable if your ADA is terminated | | Damages | number of undeveloped | after notice | and you have not developed all Basecamp | | | Basecamp studios | from us | studios you agreed to develop under the ADA. | | Music | Currently, $1,100 per | As incurred | This fee may change annually upon notice | | Licensing Fee | year, per Basecamp Studio. | | to you commensurate with increases from our music vendor. | | Bookkeeping | Up to $500 per month, | As incurred | We currently do not require franchisees to | | Software Fee | per Basecamp Studio | | use a designated bookkeeping vendor, but we may do so in the future and if so, you will be required to pay us or the vendor for the service. | | Charitable | $100 per month if you | Monthly | This is a voluntary contribution you will | | Contribution | choose to contribute | | make once
Source: Item 6 — OTHER FEES (FDD pages 17–24)
What This Means (2025 FDD)
According to Basecamp Fitness's 2025 Franchise Disclosure Document, the CEC Credit Deficiency fee is payable if a franchisee fails to meet the Continuing Engagement Credit minimum in any given year. The fee is $1.00 per credit deficiency, multiplied by the number of Basecamp Studios the franchisee owns. This fee is due immediately after notice from Basecamp Fitness. Basecamp Fitness will then deposit the collected fees into the General Advertising and Marketing Fund.
Continuing Engagement Credits are likely related to ongoing training or engagement activities required by Basecamp Fitness to ensure franchisees and their staff maintain a certain level of expertise or compliance with brand standards. Failing to meet these minimums suggests a lack of commitment to these standards, which Basecamp Fitness addresses through this fee.
For a prospective franchisee, this means understanding the requirements for Continuing Engagement Credits and budgeting for the potential cost of non-compliance. It's crucial to clarify with Basecamp Fitness what activities qualify for these credits, how they are tracked, and what the minimum requirements are to avoid incurring this fee. This will allow franchisees to proactively manage their engagement and avoid unexpected costs. Franchisees should also inquire about how the General Advertising and Marketing Fund is used, as the fees collected are deposited into this fund.