Who imposed the deferral requirement for initial fees for Stretch Zone franchises in Illinois?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
ILLINOIS ADDENDUM TO FRANCHISE DISCLOSURE DOCUMENT
- All initial fees are deferred until we have performed all of pre-opening obligations and you are open for business. The Illinois Attorney General's Office imposed this deferral requirement due to our financial condition.
ITEM 5 – Initial Fees is amended to add the following applicable language at the end of the applicable section of Item 5:
INITIAL FRANCHISE FEE
The Initial Franchise Fee will be deferred and is not payable to us until we have complied with all of our pre-opening obligations to you under the Franchise Agreement and you are open for business.
Source: Item 5 — Initial Fees is amended to add the following applicable language at the end of the applicable section of Item 5: (FDD pages 89–91)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, the Illinois Attorney General's Office imposed the deferral requirement for initial fees for Stretch Zone franchises in Illinois. This requirement is due to Stretch Zone's financial condition. This deferral means that franchisees in Illinois are not required to pay any initial fees until Stretch Zone has fulfilled all of its pre-opening obligations, and the franchise is open for business. This deferral applies to both the initial franchise fee and the development fee.
This requirement is outlined in the Illinois Addendum to both the Franchise Disclosure Document and the Area Development Agreement. Specifically, the addendum states that all initial fees are deferred until Stretch Zone has performed all pre-opening obligations and the franchise is open. This deferral provides a significant benefit to franchisees in Illinois, as it reduces their upfront financial burden and aligns Stretch Zone's interests with the franchisee's success in opening the business.
For prospective Stretch Zone franchisees in Illinois, this deferral of initial fees represents a considerable advantage. It lowers the initial investment required to start the franchise and reduces the risk associated with investing in a new business. However, it is important for potential franchisees to understand the reasons behind this deferral, which, in this case, is due to Stretch Zone's financial condition. Franchisees should conduct thorough due diligence to assess the franchisor's financial stability and long-term viability, despite the deferred fee structure.