When did Stretch Zone enter into the celebrity endorsement contract?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
o Financial Statements December 31, 2024 and 2023
NOTE F - CELEBRITY ENDORSEMENT AND MARKETING
In January 2021, the Company entered into an agreement with a board member whereby a celebrity endorsement contract was established for a term of four years with the ability for the Company to use the celebrity's likeness for an additional twelve months. Effective March 31, 2023, the celebrity resigned from the board of directors and is no longer considered a related party. The agreement calls for annual payments relating to increased royalty revenue, with a minimum payment for year one of $200,000. Effective June 2023, the agreement was modified to limit the payment to quarterly payments of $125,000, with the first payment due on September 30, 2023. The terms of the original contract were extended to December 31, 2028. T
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 company entered into a celebrity endorsement contract in January 2021. The agreement was made with a board member and established a four-year term, allowing Stretch Zone to use the celebrity's likeness for an additional twelve months.
In March 2023, the celebrity resigned from the board of directors and was no longer considered a related party. The endorsement agreement initially called for annual payments tied to increased royalty revenue, with a minimum payment of $200,000 for the first year.
The terms of the agreement were later modified in June 2023 to limit payments to quarterly installments of $125,000, with the first payment due on September 30, 2023. Furthermore, the original contract's term was extended to December 31, 2028. Stretch Zone paid $500,000 in 2024 and $632,497 in 2023 related to this agreement.