In which geographic areas did Stretch Zone grant Drew Brees Area Development Rights?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
laim the representations we made in this FDD. Any representations or promises outside the FDD and the Area Development Agreement may not be enforceable. | | u. Dispute resolution by arbitration or mediation1 | Section 9.1 | All disputes must be resolved first by informal dispute resolution and, if unsuccessful, by mediation and, if mediation is not successful, then by arbitration except claims involving: 1. The Intellectual Property; 2. Any lease or sublease of real property; 3. Your obligations upon termination or expiration of your Area Development Agreement; 4. Any transfers; 5. Matters involving claims of danger, health or safety; and 6. Requests for restraining orders, injunctions or similar procedures. You must waive your rights to a jury trial and claims for punitive damages. |
| Provision | Section in Area Development Agreement | Summary |
|---|---|---|
| v. Choice of forum1 | Section 9.1 | Subject to state law, any informal dispute resolution, |
| mediation or arbitration proceeding must be conducted | ||
| where our principal office is located |
Source: Item 18 — ITEM -18 PUBLIC FIGURES (FDD page 73)
What This Means (2025 FDD)
According to the 2025 Stretch Zone Franchise Disclosure Document, as part of a Celebrity Endorsement Agreement effective January 2021, Stretch Zone granted Drew Brees Area Development Rights for 20 franchises. These franchises are to be located in the greater New Orleans, Indianapolis, and San Diego areas. This agreement was amended in June 2023 to extend the term to December 31, 2028, increase the guaranteed minimum annual payment to $500,000, and issue certain Class C units of their Parent company to Mr. Brees.
Area Development Rights allow a developer to open multiple Stretch Zone franchises within a specified area, according to a negotiated development schedule. However, these rights are not exclusive, and Stretch Zone retains the right to establish other franchised or company-owned units within the same Development Area. The Area Development Agreement also stipulates that the developer cannot select a site within the limited protected territory of an existing Company-Owned or Franchised Unit.
For prospective franchisees, this agreement with Drew Brees highlights Stretch Zone's commitment to marketing and brand recognition. However, it's important to note that while Brees has Area Development Rights in specific locations, this does not prevent Stretch Zone from offering franchises to others in the same general market. Franchisees should carefully consider the potential for competition within these areas, even if they are not located directly within Brees' designated territories.
Furthermore, the agreement grants Brees a Right of First Refusal for franchises in Orange County, California. This means that if Stretch Zone intends to grant a franchise in Orange County, Brees has the first opportunity to acquire it. This could impact the availability of franchise opportunities in that specific region for other potential franchisees.