What are the primary components of the franchise fees for a Stretch Zone franchise?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) Contributions. The Member will contribute to the DMA Cooperative on a monthly basis, an amount not to exceed 1% of its Gross Revenues. The initial amount of monthly Contributions will be determined at the organizational meeting of the Members. All payments will be made through the ClubReady Electronic Payment system described in Section 3.3 of the Franchise Agreement. The amount of monthly Contributions to the DMA Cooperative will be reviewed and revised accordingly by majority vote of the Members at any regular meeting of the Members as provided in Article 4, Section 1 of the Bylaws.
- (d) Delinquent Payments. All late payments accrue interest at the rate of 1.5% per month beginning the date payment was due until fully paid or at the highest rate permitted by applicable state law, whichever is less, calculated on a daily basis.
- (e) Failure to Make Payments. If the Member fails to make 2 or more consecutive monthly contributions to the DMA Cooperative, the Franchisor may elect to terminate this Agreement and the Franchise Agreement for the Franchise Business if payment is not made within 30 days of receipt of the Franchisor's written demand for payment. If the delinquent payments are not made within the 30-day cure period, the Franchisor may immediately terminate this Agreement and the Franchise Agreement for the Franchise Business upon notice to the Member without providing any additional time to cure.
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- ALLOCATION OF PROCEEDS. The funds collected by the DMA Cooperative from its Members will be used for any of the following expenditures as approved by the Members in accordance with the Bylaws and signed by the DMA Cooperative and the Franchisor in the form attached as Exhibit B:
- (a) Television and radio media placement;
- (b) Agency expenses relating to the placement of the advertising;
- (c) Point-of-Purchase (P.O.P.) materials for the DMA Cooperative's promotions; and
- (d) Administrative, professional fees and miscellaneous expenses related to the placement of advertising.
Source: Item 3 — Franchisee/Debtor's Warranties. (FDD pages 263–364)
What This Means (2025 FDD)
Based on the 2025 Stretch Zone Franchise Disclosure Document, franchisees are required to contribute to a DMA (Designated Marketing Area) Cooperative. These contributions are used for advertising and promotional efforts within the DMA.
The franchisee's contribution to the DMA Cooperative cannot exceed 1% of their gross revenues. The initial amount of monthly contributions is determined during the organizational meeting of the members. These contributions are facilitated through the ClubReady Electronic Payment system, as outlined in Section 3.3 of the Franchise Agreement.
The amount of monthly contributions is subject to review and revision through a majority vote by the members during regular meetings, as detailed in Article 4, Section 1 of the Bylaws. Late payments will incur interest at a rate of 1.5% per month, calculated daily, or the highest rate permitted by state law, whichever is less.
Failure to make payments can lead to termination of the DMA Cooperative Agreement and potentially the Franchise Agreement. If a member fails to make two or more consecutive monthly contributions, Stretch Zone may terminate the agreements if payment is not made within 30 days of a written demand for payment. If the payments remain delinquent after this 30-day cure period, Stretch Zone can immediately terminate the agreements without additional time to cure the deficiency.
The funds collected by the DMA Cooperative are allocated for expenditures approved by the members, including television and radio media placement, agency expenses for advertising placement, point-of-purchase materials, and administrative and professional fees related to advertising.