What condition must Stretch Zone Franchising, LLC meet before the initial franchise fee is payable?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
the North Dakota Franchise Investment Law.
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- Each provision of this Amendment is effective only to the extent that the jurisdictional requirements of the North Dakota Franchise Investment Law as to each provision are met independent of this Addendum. A provision has no force or effect if the jurisdictional requirements
are not met independent of this Addendum. If this Addendum is inconsistent with any terms of the Area Development Agreement, the terms of this Addendum govern.
Each of the undersigned acknowledges hav
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, the initial franchise fee of $59,500 is deferred and not payable until Stretch Zone Franchising, LLC has met all of its pre-opening obligations to the franchisee under the Franchise Agreement. This addendum applies to franchisees currently purchasing a Stretch Zone franchise. The initial franchise fee is uniform for all franchisees.
This means that a new Stretch Zone franchisee will not be required to pay the initial franchise fee until Stretch Zone has fulfilled its responsibilities related to opening the franchise location. These pre-opening obligations are detailed elsewhere in the Franchise Agreement. This arrangement potentially benefits the franchisee by aligning the payment of the fee with the franchisor's performance in setting up the franchise.
It is important for prospective Stretch Zone franchisees to carefully review the Franchise Agreement to understand exactly what constitutes Stretch Zone's pre-opening obligations. This will ensure clarity on when the initial franchise fee becomes payable and what recourse the franchisee has if Stretch Zone fails to meet these obligations. Franchisees should also confirm that the addendum is part of their franchise agreement.