Can Stretch Zone and its affiliates derive revenue from franchisee purchases and leases?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
Manual.
LOCAL ADVERTISING
You must submit to us for our approval all materials used for Local Advertising unless the materials have been previously approved by us or the materials consist only of materials we provide. You are free to use your own advertising material only if you have obtained our prior written approval.
FINANCIAL REPORTING
You must also provide us with regular reports and periodic financial statements in the form we specify.
OUR RIGHT TO DERIVE REVENUE FROM FRANCHISEE PURCHASES AND LEASES
We and/or our Affiliates may derive revenue based on your purchases and leases, including from charging you for products and services that we or our Affiliates provide to you and from promotional allowances, volume discounts, rebates, commissions, and other payments made to us or our Affiliates by suppliers and/or distributors that we designate or approve for some or all of our franchisees. We and our Affiliates may use all amounts received from suppliers and/or distributors, whether or not based on your or other franchisees' actual or prospective dealings with them, without restriction for any purposes that we or our Affiliates consider appropriate.
REVENUE FROM REQUIRED PURCHASES OR LEASES BY FRANCHISEES
We derive revenue from required purchases or leases by franchisees. Our total revenue from all operations during 2024 was $12,830,150.
Source: Item 6 — ITEM -6 OTHER FEES (FDD pages 16–33)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, Stretch Zone and its affiliates can derive revenue from franchisee purchases and leases. Stretch Zone may receive revenue through various means, including direct charges for products and services provided to franchisees, as well as promotional allowances, volume discounts, rebates, and commissions from suppliers or distributors that Stretch Zone designates or approves. These revenues can be used without restriction for any purposes Stretch Zone or its affiliates deem appropriate.
In 2024, Stretch Zone's total revenue from all operations was $12,830,150, with $2,319,603 derived from required purchases or leases by franchisees, representing 18% of their total revenue. It is estimated that required purchases and leases account for 15% to 30% of all purchases and leases when establishing a franchise business, and 70% to 85% when operating the franchise. However, during 2024, none of Stretch Zone's affiliates derived revenue from required purchases or leases by franchisees.
Prospective franchisees should be aware that they are required to purchase certain items directly from Stretch Zone, including furniture, furnishings, and fixtures, as well as sublicense various software programs such as QuickBooks Online, Career Plug, Microsoft Office 365, KnetK, Factor 4, Perkville, and Canva. Additionally, franchisees must purchase stretching tables and related accessories from Stretch Equipment, LLC, a designated supplier, and indoor signs and graphics from Store Décor, another designated supplier. Stretch Zone may modify the list of designated suppliers and required purchase items based on their experience. While Stretch Zone negotiates purchase arrangements with suppliers, they do not provide material benefits to franchisees based on the purchase of particular products or services.