What is considered a 'Company-Owned Unit' within the Stretch Zone franchise system?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
- "Company-Owned Unit" means a Stretch Zone business operated under the Business System and owned by us or any Affiliate or Predecessor.
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, a 'Company-Owned Unit' is defined as a Stretch Zone business that operates under the established 'Business System' and is owned either by the franchisor itself, or by an affiliate or predecessor of the franchisor.
This definition is important for prospective franchisees because it clarifies the distinction between franchised locations and those directly operated by Stretch Zone. Company-owned units allow Stretch Zone to test new strategies, maintain quality control, and generate revenue directly. The existence of company-owned units can also impact a franchisee's territory, as the FDD states that Stretch Zone agrees not to open a company-owned unit within a franchisee's limited protected territory, with exceptions for non-traditional locations.
Furthermore, company-owned units, along with franchised units, contribute to the Stretch Zone Media Fund, which is used for advertising, marketing, and promotional activities that benefit the entire Stretch Zone system. Franchisees should be aware of how the Media Fund is administered and how it benefits both franchised and company-owned locations. Understanding the role and impact of company-owned units is crucial for any potential Stretch Zone franchisee.