Can Stretch Zone charge the Media Fund for services they provide?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Administration. We will administer the Media Fund. We use the funds in the Media Fund to pay for the costs of creating various advertising, marketing, and promotional materials that we deem beneficial to the Business System. We also use the funds in the Media Fund to pay the costs of conducting regional and/or national advertising and promotional activities (including the cost of producing advertising campaigns and marketing materials, conducting test marketing and marketing surveys, and public relations activities) that we deem beneficial to the Business System. We can charge the Media Fund for our costs for services we provide, in lieu of engaging third party agencies to provide these services. We will not use any of the funds to offer or sell Stretch Zone Franchises to prospective franchisees. 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 this ARTICLE 7.
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, Stretch Zone can charge the Media Fund for services they provide. Specifically, Stretch Zone can charge the Media Fund for their costs for services they provide in lieu of engaging third-party agencies to provide these services.
This means that Stretch Zone has the discretion to use the Media Fund to pay for the creation of advertising, marketing, and promotional materials that they believe will benefit the Stretch Zone business system. This includes the costs of regional and national advertising and promotional activities, such as producing advertising campaigns, conducting test marketing and marketing surveys, and engaging in public relations activities.
This arrangement gives Stretch Zone control over how the Media Fund is spent, potentially ensuring that the funds are used in a way that aligns with the overall goals of the franchise system. However, it also means that franchisees have less direct control over how their advertising contributions are used, as all expenditures are at Stretch Zone's sole discretion.