If Stretch Zone terminates the Media Fund, how will the remaining funds be disbursed?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
- (f) 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 8 — Receipts. Any sale made must be in compliance with § 683(8) of the Franchise Sale Act (N.Y. Gen. Bus. L. § 680 et seq.), which describes the time period a Franchise Disclosure Document (offering prospectus) must be provided to a prospective franchisee before a sale may be made. New York law requires a franchisor to provide the Franchise Disclosure Document at the earliest of the first personal meeting or ten (10) business days before the execution of the franchise or other agreement or the payment of any consideration that relates to the franchise relationship. (FDD pages 99–263)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, Stretch Zone retains the right to terminate the collection and disbursement of advertising contributions and the Media Fund. Upon such termination, the remaining funds will be disbursed to both existing franchised units and company-owned units. This disbursement will be on a pro-rata basis, meaning the distribution will be proportional to each unit's relative amount of contributions to the fund.
For a prospective Stretch Zone franchisee, this means that if the Media Fund is terminated, they would receive a portion of the remaining funds back, based on how much they contributed to the fund compared to other franchisees and company-owned locations. This pro-rata distribution ensures fairness in the return of funds, as those who contributed more would receive a larger share.
It is important to note that Stretch Zone has the right to terminate the Media Fund, which could impact the marketing and advertising strategies for individual franchisees. While the pro-rata disbursement provides some financial return, franchisees should consider the potential loss of marketing support previously provided by the Media Fund when evaluating this aspect of the franchise agreement.