What pre-opening obligations must Stretch Zone fulfill before initial fees are due in Illinois?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
ILLINOIS ADDENDUM TO FRANCHISE DISCLOSURE DOCUMENT
- All initial fees are deferred until we have performed all of pre-opening obligations and you are open for business. The Illinois Attorney General's Office imposed this deferral requirement due to our financial condition.
ITEM 5 – Initial Fees is amended to add the following applicable language at 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.
INITIAL CONTRIBUTION TO MEDIA FUND
Source: Item 5 — Initial Fees is amended to add the following applicable language at the end of the applicable section of Item 5: (FDD pages 89–91)
What This Means (2025 FDD)
According to the 2025 Stretch Zone Franchise Disclosure Document, franchisees in Illinois do not have to pay initial fees until Stretch Zone has fulfilled all of its pre-opening obligations and the franchisee is open for business. This deferral was mandated by the Illinois Attorney General's Office due to Stretch Zone's financial condition. This condition applies to both the initial franchise fee of $59,500 and any development fees.
Specifically, the Illinois Addendum to the Franchise Disclosure Document states that all initial fees are deferred until Stretch Zone has performed all pre-opening obligations and the franchisee is open for business. This amendment is added to Item 5, which discusses initial fees, clarifying that the initial franchise fee is not payable until Stretch Zone has met its pre-opening obligations under the Franchise Agreement and the franchisee is operational. Similarly, the development fee is deferred until Stretch Zone has complied with its pre-opening obligations under both the Area Development Agreement and the Franchise Agreement for the first franchise business.
This deferral of fees provides a significant benefit to franchisees in Illinois, as it reduces their upfront financial risk. Franchisees can be assured that they will not be required to pay initial fees until Stretch Zone has provided the necessary support and resources to help them get their business up and running. This protection is particularly important given that the deferral was imposed due to Stretch Zone's financial condition, suggesting that the company may have faced financial challenges that could have impacted its ability to support franchisees.