Under what conditions can Basecamp Fitness exercise its option to purchase my business assets?

According to Basecamp Fitness's 2025 Franchise Disclosure Document, Basecamp Fitness has the option to purchase all or a portion of the assets of your Basecamp Studio. This can occur upon the termination or expiration without renewal of your Franchise Agreement. The purchase price would be at book value, and Basecamp Fitness can also take an assignment of your leases.

This provision means that if a franchisee's agreement ends, either through a decision not to renew or through termination by Basecamp Fitness due to a breach of contract, Basecamp Fitness has the right to buy the physical assets of the business, such as equipment and inventory, at their book value (typically the original cost minus depreciation). They can also take over the leases for the studio space.

For a prospective franchisee, this is an important consideration. It means that upon exiting the franchise system, you may be required to sell your business assets to Basecamp Fitness at a price they determine based on book value, which may or may not reflect the fair market value. This could impact the financial return you receive from your investment when you leave the system. It is also important to understand the conditions under which Basecamp Fitness can terminate the agreement, as this would trigger their option to purchase your assets.

Many franchise agreements contain similar clauses allowing the franchisor to repurchase the assets or the business itself under certain conditions, especially upon termination or expiration. This allows the franchisor to maintain control over the brand and the location. However, the valuation method (book value versus fair market value) can significantly affect the franchisee's financial outcome. Therefore, a prospective Basecamp Fitness franchisee should carefully consider this provision and seek legal and financial advice to fully understand its implications.