What happens to unspent monies in the Stretch Zone Media Fund at the end of the year?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
Expenditures. All expenditures are at our sole discretion. We may spend in any calendar year more or less than the total Advertising Contributions to the Media Fund in that year. We may loan to the Media Fund or borrow from other lenders for the Media Fund to cover deficits of the Media Fund or cause the Media Fund to invest any surplus for future use by the Media Fund. We will carry any monies not spent by the Media Fund in any particular year to fund production expenses in the next year.
Termination of Expenditures. We maintain the right to terminate the collection and disbursement of the Advertising Contributions and the Media Fund. Upon termination, we will disburse the remaining funds to existing Franchised Units and Company-Owned Units on a pro-rata basis based on their relative amount of contributions.
Source: Item 11 — ITEM -11 FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 36–44)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, any unspent funds in the Media Fund at the end of a particular year will be carried over to cover production expenses in the following year. This means that the contributions franchisees make to the Media Fund are not lost if they are not immediately used. Instead, Stretch Zone retains these funds for future advertising, marketing, and promotional activities. This policy ensures that the Media Fund has a continuous source of capital to support ongoing and future marketing efforts.
Stretch Zone may also spend more or less than the total advertising contributions in any given calendar year. To manage these fluctuations, Stretch Zone has the option to loan money to the Media Fund or borrow from other lenders to cover any deficits. Additionally, Stretch Zone can invest any surplus funds for future use by the Media Fund. This financial flexibility allows Stretch Zone to adapt its marketing strategies and spending based on the needs of the Business System.
In the event that Stretch Zone decides to terminate the Media Fund, the remaining funds will be disbursed to existing franchised and company-owned units. The disbursement will be on a pro-rata basis, meaning that the funds will be distributed in proportion to each unit's relative contributions to the Media Fund. This ensures that franchisees receive a fair return of any remaining funds based on their investment in the advertising efforts.