When did the celebrity resign from the board of directors of Stretch Zone?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
o Financial Statements December 31, 2024 and 2023
NOTE F - CELEBRITY ENDORSEMENT AND MARKETING
In January 2021, the Company entered into an agreement with a board member whereby a celebrity endorsement contract was established for a term of four years with the ability for the Company to use the celebrity's likeness for an additional twelve months. Effective March 31, 2023, the celebrity resigned from the board of directors and is no longer considered a related party. The agreement calls for annual payments relating to increased royalty revenue, with a minimum payment for year one of $200,000. Effective June 2023, the agreement was modified to limit the payment to quarterly payments of $125,000, with the first payment due on September 30, 2023. The terms of the original contract were extended to December 31, 2028. T
Source: Item 3 — Franchisee/Debtor's Warranties. (FDD pages 263–364)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, a celebrity who was also a board member resigned from the board of directors effective March 31, 2023. Following this resignation, the celebrity was no longer considered a related party by Stretch Zone. This information is found in the notes to the financial statements.
Prior to the resignation, Stretch Zone had a celebrity endorsement contract with this individual, which was established in January 2021 for a term of four years, allowing Stretch Zone to use the celebrity's likeness for an additional twelve months. The agreement initially called for annual payments tied to increased royalty revenue, with a minimum payment of $200,000 for the first year.
In June 2023, after the celebrity's resignation, the agreement was modified to limit payments to quarterly installments of $125,000, with the first payment due on September 30, 2023. Despite the resignation, the terms of the original contract were extended to December 31, 2028. Stretch Zone paid $632,497 in 2023 related to this agreement. This arrangement highlights the importance of celebrity endorsements in Stretch Zone's marketing strategy and the financial commitments associated with it, even after the celebrity's formal departure from the board.