When are advertising contributions to an Advertising Cooperative due for a Stretch Zone franchise?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
Once an advertising cooperative is formed, Company-Owned Units whose limited protected territories are located within the DMA of the advertising cooperative must join the advertising cooperative and will have the same voting power as Franchised Units on all matters, including fees. The obligation of each Unit to contribute to an advertising cooperative (if formed in the applicable DMA) will not exceed 2% of monthly Gross Revenues. We will credit these contributions against your obligation for Local Advertising.
Source: Item 6 — ITEM -6 OTHER FEES (FDD pages 16–33)
What This Means (2025 FDD)
According to the 2025 Stretch Zone Franchise Disclosure Document, the obligation of each unit to contribute to an advertising cooperative, if formed in the applicable Designated Market Area (DMA), will not exceed 2% of monthly Gross Revenues. These contributions will be credited against the franchisee's obligation for Local Advertising. However, the document does not specify the exact due date for these advertising cooperative contributions.
While the FDD mentions that Royalty Fees and Technology Fees are deducted from ClubReady remittances twice weekly, there is no similar statement regarding the advertising cooperative contributions. The FDD also details the initial Advertising Contribution to the Media Fund, which is due when the location opens and is deducted from ClubReady Remittances, but this is separate from ongoing contributions to an advertising cooperative.
Therefore, a prospective Stretch Zone franchisee should inquire with the franchisor about the specific payment schedule and method for advertising cooperative contributions to fully understand this financial obligation. Understanding the timing of these payments is crucial for managing cash flow and budgeting effectively.