What is the amount of the initial franchise fee for a Stretch Zone franchise, as stated in the addendum?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
the North Dakota Franchise Investment Law.
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- Each provision of this Amendment is effective only to the extent that the jurisdictional requirements of the North Dakota Franchise Investment Law as to each provision are met independent of this Addendum. A provision has no force or effect if the jurisdictional requirements
are not met independent of this Addendum. If this Addendum is inconsistent with any terms of the Area Development Agreement, the terms of this Addendum govern.
Each of the undersigned acknowledges having read this Addendum, und
Source: Item 8 — Receipts. Any sale made must be in compliance with § 683(8) of the Franchise Sale Act (N.Y. Gen. Bus. L. § 680 et seq.), which describes the time period a Franchise Disclosure Document (offering prospectus) must be provided to a prospective franchisee before a sale may be made. New York law requires a franchisor to provide the Franchise Disclosure Document at the earliest of the first personal meeting or ten (10) business days before the execution of the franchise or other agreement or the payment of any consideration that relates to the franchise relationship. (FDD pages 99–263)
What This Means (2025 FDD)
According to the 2025 Stretch Zone FDD, the initial franchise fee is $59,500. However, according to the addendum, this fee is deferred and not payable until Stretch Zone has fulfilled all of its pre-opening obligations to the franchisee. This deferral is a notable benefit for new franchisees as it reduces the upfront financial burden and aligns the payment of the fee with the franchisor's commitment to providing initial support.
This arrangement is somewhat unusual in the franchise industry, as initial franchise fees are typically paid upfront to secure the franchise rights and cover the franchisor's initial costs of setting up the franchisee. The deferral of the fee suggests that Stretch Zone is confident in its ability to deliver on its pre-opening obligations and is willing to share some of the initial risk with the franchisee.
Prospective franchisees should carefully review the franchise agreement and addendum to fully understand Stretch Zone's pre-opening obligations and the conditions under which the initial franchise fee becomes payable. This includes clarifying the specific milestones or deliverables that trigger the payment and ensuring that these obligations are clearly defined and measurable.