When was the first quarterly payment due to the celebrity under the modified agreement with Stretch Zone?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
al payments relating to increased royalty revenue, with a minimum payment for year one of $200,000. Effective June 2023, the agreement was modified to li
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, a celebrity endorsement contract was established in January 2021. The agreement was modified in June 2023 to specify quarterly payments.
The modified agreement stipulated that the first quarterly payment of $125,000 to the celebrity was due on September 30, 2023. This modification changed the payment structure from annual payments tied to increased royalty revenue to fixed quarterly installments.
This arrangement could impact Stretch Zone's financial planning, as it commits the company to regular payments regardless of revenue fluctuations. Prospective franchisees should be aware of these fixed costs, as they could affect the overall profitability and financial stability of the franchise system.