If Stretch Zone establishes a regional advertising cooperative, what is the franchisee's obligation?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
As of the date of this Disclosure Document, we have established two advertising cooperatives. Once an advertising cooperative is formed, Company-Owned Units whose limited protected territories are located within the DMA of the advertising cooperative must join the advertising cooperative and will have the same voting power as Franchised Units on all matters, including fees. The obligation of each Unit to contribute to an advertising cooperative (if formed in the applicable DMA) will not exceed 2% of monthly Gross Revenues. We will credit these contributions against your obligation for Local Advertising.
Source: Item 6 — ITEM -6 OTHER FEES (FDD pages 16–33)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, if a regional advertising cooperative is formed in a franchisee's Designated Market Area (DMA), the franchisee is obligated to join it. Company-owned units in the same DMA also must participate.
The franchisee's contribution to the advertising cooperative cannot exceed 2% of their monthly Gross Revenues. This contribution is then credited against the franchisee's obligation for local advertising.
This arrangement ensures that all units within a DMA contribute to regional advertising efforts, with the amount capped to protect franchisees' financial interests. By crediting these contributions against local advertising obligations, Stretch Zone aims to streamline advertising expenses and avoid double-billing franchisees for marketing efforts in the same geographic area.