What pre-opening obligations must Stretch Zone comply with before the Initial Franchise Fee is payable?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
under the North Dakota Franchise Investment Law. Arbitration involving Area Development Rights purchased in the State of North Dakota must be held either in a location mutually agreed upon before the arbitration or if the parties cannot agree on a location, the arbitrator will determine the location.
- (e) If the Area Development Agreement requires payment of a termination penalty, the requirement may be unenforceable under the North Dakota Franchise Investment Law.
- (f) Any provision in the Area Development Agreement which requires you to consent to a waiver of exemplary and punitive damages will not apply to any claims brought under the under the North Dakota Franchise Investment Law.
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- Each provision of this Amendment is effective only to the extent that the jurisdictional requirements of the North Dakota Franchise Investment Law as to each provision are met independent of this Addendum. A provision has no force or effect if the jurisdictional requirements
are not met independent of this Addendum. If this Addendum is inconsistent with any terms of the Area Development Agreement, the terms of this Addendum govern.
Each of the undersigned acknowledges having read this Addendum, understands and consents to be bound by all of its terms.
| FRANCHISOR: | DEVELOPER: | | |----------------------------------------------------------------------|------------------------------------------|--| | STRETCH ZONE FRANCHISING LLC, a | (IF ENTITY): | | | Florida limited liability company | | | | By: Tony Zaccario, CEO and President Date:, 20 | [Name] By: Name: Title: Date:, 20 (IF INDIVIDUALS): [Signature] [Print Name] Date:, 20 [Signature] [Print Name] Date:, 20 | |
SOUTH DAKOTA ADDENDUM TO FRANCHISE AGREEMENT
| "your") to amend the Franchise Agreement as follows: | This Addendum to Franchise Agreement is signed on between Stretch Zone Franchising, LLC ("we" "us" or "our") and ("you" or |
|---|---|
| 1. | Section 3.1(a) of the Franchise Agreement is amended as follows: |
| (a) and you are open for business. Franchisees currently purchasing a Franchise. | Initial Franchise Fee. You must pay to us an Initial Franchise Fee of $59,500. 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 this Agreement The Initial Franchise Fee is uniform as to all Each of the undersigned acknowledges having read this Addendum, understands and |
| consents to be bound all of its terms. |
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 $59,500 initial franchise fee is deferred and not payable until Stretch Zone has complied with all of its pre-opening obligations to the franchisee under the Franchise Agreement, and the franchisee is open for business. This deferred payment structure is outlined in an addendum to the franchise agreement, ensuring that Stretch Zone fulfills its initial responsibilities before requiring the franchisee to pay the initial fee.
Stretch Zone's pre-opening obligations include providing written consent to open the franchise when certain conditions are met. These conditions include the franchisee fulfilling obligations under Sections 4.1 through 4.9 of the agreement, ensuring the franchise business is constructed and equipped according to approved plans, and that designated individuals have completed pre-opening training to Stretch Zone's satisfaction. Additionally, the franchisee must have at least one Certified Stretch Zone Practitioner, have paid all amounts due to Stretch Zone, furnished certificates of insurance, obtained a certificate of occupancy, and secured all necessary licenses and permits.
This arrangement benefits the franchisee by aligning Stretch Zone's interests with the successful launch of the franchise. By deferring the initial franchise fee until these key pre-opening obligations are met, Stretch Zone is incentivized to provide the necessary support and guidance to get the franchisee's business up and running. This can reduce the financial risk for the franchisee during the initial stages of the business, as they are not required to pay the full franchise fee until Stretch Zone has delivered on its promises.
It is important for prospective Stretch Zone franchisees to carefully review Sections 4.1 through 4.9 of the Franchise Agreement to fully understand their obligations. Additionally, franchisees should confirm that all training requirements and facility specifications are clearly defined and achievable within the given timeframe. Understanding these pre-opening obligations and conditions is crucial for a smooth and successful launch of the Stretch Zone franchise.