Does Stretch Zone allow franchisees to be third-party beneficiaries of the Media Fund?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
We have the sole right to enforce your obligations and all other Franchisees that make Advertising and Marketing Contributions. Neither you, nor any other Franchisee obligated to make Advertising and Marketing Contributions, is a third party beneficiary of the funds nor has any right to enforce any obligation to contribute the funds. [Subsection 3.1(c) of the Franchise Agreement.]
We assume no other direct or indirect liability or obligation to you for the maintenance, direction or administration of the Media Fund, except as expressly provided in ARTICLE 7 of the Franchise Agreement.
We can charge the Media Fund for our costs for services we provide, in lieu of engaging third party agencies to provide these services. [Subsection 7.4(b) of the Franchise Agreement]
Source: Item 23 — ADVERTISING RECEIPTS AND EXPENDITURES FOR FISCAL YEAR 2024 (FDD pages 44–54)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, franchisees are not considered third-party beneficiaries of the Media Fund. This means that while franchisees are obligated to contribute to advertising and marketing efforts, they do not have the right to independently enforce any obligations related to the fund. Stretch Zone retains sole authority over the management and enforcement of these advertising contributions.
This arrangement gives Stretch Zone significant control over the Media Fund, including how the contributions are spent and managed. The company assumes no direct or indirect liability to franchisees regarding the fund's maintenance, direction, or administration, except as expressly provided in the Franchise Agreement. Stretch Zone can also charge the Media Fund for its own services in lieu of hiring third-party agencies.
For a prospective Stretch Zone franchisee, this implies a limited ability to influence or directly oversee how advertising funds are utilized. While franchisees contribute to the Media Fund, the ultimate decisions regarding its use rest with Stretch Zone. Franchisees should carefully review Article 7 of the Franchise Agreement, as referenced in the disclosure, to understand the specific terms and conditions governing the Media Fund and Stretch Zone's responsibilities.