Does Stretch Zone have pre-opening obligations that must be met before the Initial Franchise Fee is payable?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
The typical length of time between the signing of the Franchise Agreement and the opening of the Franchise Business can vary from 30 to 120 days. The factors that affect this period usually includes the time needed to acquire a site for your Franchise Business, to negotiate a lease, to arrange for financing, to comply with local ordinances and obtain building permits, to hire employees, weather conditions, shortages, or delayed installation of equipment, fixtures and signs and, other operational issues, etc., and the time when you complete, to our satisfaction, our Pre-Opening Training and any other pre-opening training requirements that we require. If you fail to open within 6 months of signing the Franchise Agreement, you are in material default under the Franchise Agreement and we have the right to terminate the Franchise Agreement and retain the Initial Franchise Fee. If we terminate the Franchise Agreement you must also sign the Franchise Termination and Release Agreement included in Exhibit N. [Subsection 4.10(b) of the Franchise Agreement].
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 Stretch Zone's 2025 Franchise Disclosure Document, franchisees have pre-opening obligations that must be met. Specifically, the document states that if a franchisee fails to open their location within 6 months of signing the Franchise Agreement, they are in material default. If this occurs, Stretch Zone has the right to terminate the Franchise Agreement and retain the Initial Franchise Fee.
This means that while the Initial Franchise Fee is generally payable upon signing the agreement, franchisees must actively work towards opening their Stretch Zone location within the specified timeframe. Failure to do so can result in the loss of the franchise and the initial fee paid.
Prospective franchisees should carefully consider the factors that could affect their ability to open within 6 months, such as site acquisition, lease negotiation, financing, permits, hiring, and potential delays in equipment installation. Understanding these potential hurdles is crucial to meeting Stretch Zone's pre-opening requirements and protecting their investment.