In North Dakota, when is the Stretch Zone Development Fee payable?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
DEVELOPMENT FEE
The Development 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 the Franchise Agreement for the 1st Franchise Business.
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, the Development Fee in North Dakota is deferred. It is not payable until Stretch Zone has met all pre-opening obligations to the franchisee under both the Area Development Agreement and the Franchise Agreement for the first Franchise Business.
This deferral is a specific requirement imposed by the North Dakota Division of Securities due to Stretch Zone's financial condition. This means that prospective franchisees in North Dakota will not be required to pay the Development Fee upfront, which can be a significant financial benefit.
This condition provides added security for franchisees in North Dakota, ensuring that Stretch Zone fulfills its obligations before requiring payment of the Development Fee. This contrasts with standard franchising practices where initial fees are often paid upon signing the agreement. Franchisees should confirm all pre-opening obligations are fulfilled before remitting payment.