What was the initial term length of the celebrity endorsement contract for Stretch Zone?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
In January 2021, the Company entered into an agreement with a board member whereby a celebrity endorsement contract was established for a term of four years with the ability for the Company to use the celebrity's likeness for an additional twelve months.
Source: Item 3 — Franchisee/Debtor's Warranties. (FDD pages 263–364)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, the initial term length of the celebrity endorsement contract was four years, with an option for Stretch Zone to use the celebrity's likeness for an additional twelve months. The agreement was established in January 2021 with a board member.
This contract also stipulated annual payments tied to increased royalty revenue, with a minimum payment of $200,000 for the first year. The agreement was later modified in June 2023 to limit payments to quarterly installments of $125,000, starting September 30, 2023.
Notably, the terms of the original contract were extended to December 31, 2028. Additionally, the celebrity was enabled to open 20 Stretch Zone stores valued at $533,250 under a consolidated area development agreement as of December 31, 2021. This celebrity endorsement asset is being amortized over five years, adjusted for the amendment and extension, while the deferred revenue is recognized as revenue upon each store opening.