Are Stretch Zone company-owned units required to contribute to the Media Fund, and if so, on what basis?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
- (e) Advertising Contributions by Us. Company-Owned Units are required to contribute to the Media Fund on the same basis that Franchised Units are required to contribute.
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 Stretch Zone's 2025 Franchise Disclosure Document, company-owned units are indeed required to contribute to the Media Fund. The basis for their contribution is the same as that for franchised units. This means that Stretch Zone's corporate locations are held to the same standard as its franchisees when it comes to supporting the brand's marketing efforts through the Media Fund.
The Media Fund is used to pay for various advertising, marketing, and promotional materials that Stretch Zone deems beneficial to the Business System. These funds also cover the costs of regional and national advertising and promotional activities, including producing campaigns, conducting market surveys, and managing public relations. Stretch Zone has the discretion to charge the Media Fund for its services instead of hiring third-party agencies.
Stretch Zone retains sole discretion over all advertising, marketing, and public relations programs financed by the Media Fund. The advertising is anticipated to be placed in regional and/or national markets via television, radio, periodicals, newspapers, and direct mail campaigns. However, Stretch Zone is not obligated to spend any of a franchisee's contributions specifically within their Limited Protected Territory.
At the end of each fiscal year, Stretch Zone will prepare an annual report of the Media Fund's receipts and expenditures, providing a copy to all franchisees within 150 days. This report is unaudited. If the collection and disbursement of advertising contributions are terminated, any remaining funds will be distributed to existing franchised and company-owned units on a pro-rata basis, based on their relative contributions.