Does the Minnesota Department of Commerce impose a deferral of initial fees for all Stretch Zone franchises?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
Based on our financial information submitted, the Minnesota Department of Commerce has imposed a deferral of initial fees until we have performed all of our pre-opening obligations and you are open for business,
ITEM 5 and ITEM 7 are amended to add the following applicable language to the end of the applicable section of Items 5 and 7:
INITIAL FEES
All fees paid to the Franchisor by the Franchisee, including payments for goods and services received from the Franchisor before the business opens, shall be deferred pending satisfaction of all of the Franchisor's pre-opening obligations to the Franchisee.
INITIAL CONTRIBUTION TO MEDIA FUND
The initial Advertising Contribution 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.
DEVELOPMENT FEE
In addition, all Development Fees and initial payments by Developers shall be deferred until the first Franchise under the Area Development Agreement opens.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 91–99)
What This Means (2025 FDD)
According to the 2025 Stretch Zone Franchise Disclosure Document, the Minnesota Department of Commerce has imposed a deferral of initial fees for Stretch Zone franchises in Minnesota. This deferral is based on the financial information Stretch Zone submitted to the department.
Specifically, all fees paid to Stretch Zone by the franchisee, including payments for goods and services received before the business opens, are deferred until Stretch Zone has fulfilled all of its pre-opening obligations to the franchisee and the franchisee is open for business. This deferral also applies to the initial advertising contribution, which is not payable until Stretch Zone has met its pre-opening obligations and the franchisee is open.
Furthermore, all development fees and initial payments by developers are deferred until the first Stretch Zone franchise under the Area Development Agreement opens. This deferral of fees is a significant benefit for franchisees in Minnesota, as it reduces the upfront financial burden and aligns the payment of fees with the progress of the franchise setup and opening.