On what date did the Parent issue Class C units as additional compensation to the celebrity for Stretch Zone?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
ended December 31, 2024 and 2023 and there were $0 and $5,000 in accounts receivable, respectively.
The Parent issued 11,478 units of Class C units of the Parent, valued at $385,186, on September 1, 2023, as additional compensation to the celebrity and was included in the celebrity endorsement. The amortization of the celebrity endorsement was $121,568 and $97,297 for the years ended December 31, 2024 and 2023, respe
Source: Item 3 — Franchisee/Debtor's Warranties. (FDD pages 263–364)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, the Parent issued Class C units to a celebrity endorser on September 1, 2023. These units, numbering 11,478, were valued at $385,186 and were provided as additional compensation as part of the celebrity endorsement agreement. The document also mentions that the value of unvested Class C units amounted to approximately $2,587,000.
This transaction is noteworthy for a prospective Stretch Zone franchisee because it illustrates how Stretch Zone utilizes equity and celebrity endorsements as part of its overall business strategy. Understanding these arrangements can provide insight into the company's financial structure and marketing approach.
It's important to note that the issuance of these units and the associated celebrity endorsement are accounted for in Stretch Zone's financial statements, with amortization of the celebrity endorsement impacting the company's reported expenses over time. Specifically, the amortization of the celebrity endorsement was $121,568 and $97,297 for the years ended December 31, 2024 and 2023, respectively. This accounting treatment can affect Stretch Zone's profitability and financial performance, which are key considerations for potential franchisees.