Is the initial franchise fee for a Stretch Zone franchise refundable?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
promotes our financial or other interest. Examples of items that will promote or benefit the Business System include enhancing the value of the Intellectual Property, improving customer service and satisfaction, improving product quality, improving uniformity, enhancing or encouraging modernization and improving the competitive position of the Business System.
Section 2.22 ASSISTANCE WE DO NOT PROVIDE
We do not provide assistance with conforming the Business Premises to local ordinances and building codes and obtaining any required payments, and/or constructing, remodeling, or decorating the Business Premises, and/or hiring and, except for training required under this Agreement, training employees. These are your responsibility.
ARTICLE 3 - FEES AND PAYMENTS
Section 3.1 TYPES OF FEES
In consideration of our signing this Agreement, you must pay to us the following fees all payable in United States currency at our principal office:
- (a) Initial Franchise Fee. You must pay to us an Initial Franchise Fee of $59,500 payable at the same time you sign this Agreement. The Initial Franchise Fee is non-refundable upon signing this Agreement.
- (b) Royalty Fee. You will pay a continuing monthly non-refundable Royalty Fee equal to 7% of Gross Revenues. However, you must pay a minimum monthly Royalty Fee of $900 beginning on the 1st full calendar month after the Opening Date. THIS MINIMUM ROYALTY FEE IN NO WAY INFERS THAT YOU WILL EXPERIENCE GROSS REVENUES OF ANY PARTICULAR LEVEL.
- (c) Technology Fee. For providing you with a store e-mail account, a listing on our Website and a sublicense of the Stretch Net, Career Plug, Office 365, QuickBooks Online, KnetK, Factor 4, Predictive Index, Canva, and Perkville, we will charge you a monthly fee contained in the Operations Manual or otherwise provided in writing (currently $375 per month), which we may modify.
- (d) Opening Items. You must purchase from us your initial items of kits, bolsters and wedges from us.
- (e) Advertising Contributions to Media Fund. You must pay to us an initial contribution of $500 when your Franchise Business opens. You must also pay us a continuing monthly Advertising Contribution to the Media Fund in an amount equal to 2% of monthly Gross Revenues.
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 the 2025 Stretch Zone Franchise Disclosure Document, the initial franchise fee is generally non-refundable. Specifically, the FDD states that the initial franchise fee of $59,500 is non-refundable once the Franchise Agreement is signed. This means that under normal circumstances, a franchisee who signs the agreement and pays the initial fee will not receive a refund of that fee, even if they later decide not to open a Stretch Zone location.
However, there is an exception to this policy for franchisees in Minnesota. The Minnesota Addendum to the Franchise Agreement states that all fees paid to Stretch Zone by the franchisee, including payments for goods and services received before the business opens, will be deferred until Stretch Zone has satisfied all of its pre-opening obligations to the franchisee. This suggests that in Minnesota, the initial fee may be refundable if Stretch Zone fails to fulfill its pre-opening obligations.
Prospective franchisees should carefully consider this non-refundable policy and the obligations outlined in the Franchise Agreement before signing and paying the initial franchise fee. It is advisable to seek legal counsel to fully understand the terms and conditions, especially regarding the circumstances under which a refund might be possible, particularly if they are considering opening a Stretch Zone franchise in Minnesota.