Does Stretch Zone audit the annual report of the receipts and expenditures of the Media Fund?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
- (i) Annual Report. We will prepare an annual report of the receipts and expenditures of the Media Fund and send a copy of the report to you and all other Franchisees within 150 days after the end of each fiscal year. We will not audit this report.
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 Franchise Disclosure Document, Stretch Zone will prepare an annual report of the receipts and expenditures of the Media Fund. This report will be sent to franchisees within 150 days after the end of each fiscal year. However, the FDD explicitly states that Stretch Zone will not audit this report.
This means that while Stretch Zone franchisees will receive a report detailing the Media Fund's financial activity, the information will not be verified by an independent auditor. Franchisees must rely on the accuracy of the report as prepared by Stretch Zone without external verification.
This lack of an audit could be a concern for prospective franchisees, as it introduces the risk of inaccuracies or misrepresentations in the reported figures. While not necessarily indicative of wrongdoing, the absence of an audit means there is no independent assurance that the funds are being managed and spent as intended. Franchisees who want greater financial transparency may find this unsatisfactory.