Can Stretch Zone charge the Media Fund for their own services instead of hiring third-party agencies?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
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, Stretch Zone has the ability to charge the Media Fund for their services instead of hiring third-party agencies to provide the same services. This means that Stretch Zone can use the money in the Media Fund to pay itself for advertising and marketing services that it provides directly.
For a prospective franchisee, this arrangement means that Stretch Zone has control over how the Media Fund is spent and can potentially profit directly from it. While this may streamline the advertising process, it also introduces a potential conflict of interest, as Stretch Zone is both managing the fund and potentially benefiting financially from it.
It is important to note that the FDD does not provide details on how Stretch Zone determines the costs for its services charged to the Media Fund, nor does it specify any limitations or oversight mechanisms to ensure fair pricing. A franchisee may want to inquire about the specific types of services Stretch Zone provides and how the costs are determined and allocated to ensure transparency and accountability in the management of the Media Fund.