In North Dakota, when is the Stretch Zone Initial Franchise Fee payable?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
All initial fees are deferred until we have performed all of pre-opening obligations and you are open for business. The North Dakota Division of Securities imposed this deferral requirement due to our financial condition.
ITEM 5 – Initial Fees is amended by adding the following applicable language to 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.
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 the 2025 Stretch Zone Franchise Disclosure Document, the initial franchise fee is deferred in North Dakota. The initial franchise fee, along with the development fee, is not payable until Stretch Zone has met all pre-opening obligations to the franchisee, and the franchisee is open for business. This deferral requirement was imposed by the North Dakota Division of Securities due to Stretch Zone's financial condition.
This means that a prospective Stretch Zone franchisee in North Dakota will not be required to pay the initial franchise fee of $59,500 until after Stretch Zone has fulfilled its pre-opening obligations, such as site selection assistance, providing training, and delivering the operations manual. Only once the Stretch Zone studio is open for business will the initial franchise fee be due.
This arrangement is more favorable for the franchisee compared to the standard practice of paying the initial franchise fee upfront. Deferring the fee reduces the initial financial burden and risk for the franchisee, as they only pay after Stretch Zone has provided the necessary support to get the business operational. This also aligns the franchisor's interests with the franchisee's success, as Stretch Zone only receives the fee once the franchise is up and running.