When is the Development Fee for a Stretch Zone franchise payable?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
---------------| | Type of Expenditure | Amount | Method of Payment | When Due | To Whom Payment Is To Be Made | | Development Fee1 | $119,000 for 2 Units to $267,750 for 6 Units | Lump Sum | On signing the Area Development Agreement | Us | | Initial Investment for 1st Franchise Business | $79,245 to $260,599 | As Incurred | As stated in invoices | Us and other Suppliers | | TOTAL | $198,245 to $528,349 | | | |
1 Development Fee. We also offer to certain qualified persons rights to develop at least 2 Franchise Businesses within a Development Area under a Stretch Zone Area Development Agreement. In consideration of the Area Development Rights we grant to you, at the time that you sign the Area Development Agreement, you will pay to us a nonrefundable Development Fee based on the number of Franchise Businesses you commit to developing.
OUR EXPERIENCE IN COMPILING THESE ESTIMATES
We relied on our almost nine years, and our predecessors' 19 years, of experience in the stretching business and the total investment in opening Stretch Zone businesses in compiling these estimates.
ITEM -8 RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES
Franchise Agreement
PURCHASES FROM US, OUR DESIGNEE OR APPROVED SUPPLIERS OR UNDER OUR SPECIFICATIONS
PURCHASES FROM US
At present, you must purchase solely from us the following items. We may change these items based on our experience.
FURNITURE, FIXTURES AND EQUIPMENT
You must purchase the furniture, furnishings and fixtures from us. We do not deliver or install these items.
BOOKKEEPING SOFTWARE
You must sublicense from us the QuickBooks Online accounting system.
HIRING AND ONBOARDING SOFTWARE
You must sublicense from us the Career Plug hiring and onboarding software.
MICROSOFT OFFICE 365 SOFTWARE
You must sublicense from us a Microsoft Office 365 Software.
KNETK SOFTWARE
You must sublicense from us KnetK Software, which is middleware software that enables marketing automation, website and data reporting and analytics, member surveys, and local website management.
FACTOR 4 SOFTWARE
You must sublicense from us Factor 4 gift card and loyalty program software.
PERKVILLE SOFTWARE
You must sublicense from us Perkville loyalty and reward programs software.
CANVA SOFTWARE
You must sublicense from us Canva graphic design tool software.
STRETCH NET SOFTWARE
You must sublicense from us Stretch Net software (our Intranet software).
PREDICTIVE INDEX
You must sublicense from us Predictive Index behavioral assessments software.
PURCHASES FROM OUR DESIGNATED SUPPLIERS
A Designated Supplier is one particular supplier from whom you must purchase certain goods or services. At present, the following are our Designated Suppliers:
INTERIOR SIGNAGE AND GRAPHICS
You must purchase interior signage and graphics from Store Décor.
COMPUTER SYSTEM
Apple Inc. and Microsoft Corporation are the Designated Suppliers of the Computer System.
POS SOFTWARE
You must license from Club Ready, Inc. its proprietary ClubReady – Healthclub Management Web Based Software for check-in, ACH processing of membership fees, credit card processing, member management, and payment of royalty fees and other fees.
Source: Item 5 — Initial Fees is amended to add the following applicable language at the end of the applicable section of Item 5: (FDD pages 89–91)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, the Development Fee is payable when you sign the Area Development Agreement. This fee is nonrefundable and compensates Stretch Zone for granting you the rights to develop multiple franchise businesses within a specific Development Area. The amount of the Development Fee varies depending on the number of franchise businesses you commit to developing.
For instance, if you commit to developing two Stretch Zone franchise businesses, the Development Fee is $119,000, which represents the Initial Franchise Fees for both businesses. If you plan to develop three franchise businesses, the Development Fee is $148,750, covering the Initial Franchise Fees for the first two franchises and 50% of the Initial Franchise Fee for the third. The remaining 50% of the Initial Franchise Fee for the third franchise is due when you sign the Franchise Agreement for that specific location. This structure continues for commitments to develop four, five, or six franchise businesses, with the Development Fee covering the full Initial Franchise Fees for the initial locations and 50% for the subsequent ones, with the balance due upon signing each respective Franchise Agreement.
For those planning to develop seven or more Stretch Zone franchise businesses, the Development Fee is calculated as 100% of the Initial Franchise Fees for 50% of the total number of franchises, plus 50% of the Initial Franchise Fees for the remaining 50%. The balance of any Initial Franchise Fee is then paid when you sign the individual Franchise Agreement for each location. This tiered payment structure allows Stretch Zone to secure commitment for area development while providing a payment schedule that aligns with the franchisee's development progress.