What is the purpose of the DMA Cooperative for Stretch Zone franchisees?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
| This Regional Advertising Cooperative Agreement (this "Agreement") is signed on among Stretch Zone Franchising, LLC, a Florida limited liability |
|---|
| company (the "Franchisor");, d/b/a Stretch Zone (the "Member"); |
| and DMA Stretch Zone Regional Advertising Cooperative, an |
| unincorporated association (the " DMA Cooperative"). |
| BACKGROUND |
| A. |
| The Franchisor and the Member are Franchisor and Franchisee respectively under a |
| Stretch Zone Franchise Agreement (the "Franchise Agreement") relating to a Franchised Business |
| within the Designated Marketing Area ("DMA"). |
| B. |
| Under Section 7.2 of the Franchise Agreement, the Franchisor has the right to |
| establish a Regional Advertising Cooperative in any DMA. |
| C. |
| This Agreement and Bylaws included in Exhibit A creates the DMA Cooperative for |
| the furtherance of each Member's sales and promotional efforts in connection with each Member's |
| operation of a Stretch Zone Franchise (collectively the "Franchises") and the Member's membership |
| in and participation with the DMA Cooperative. |
| The parties agree as follows: |
| TERMS |
| 1. |
| PURPOSE. |
| The purpose of the DMA Cooperative is the furtherance of each |
| Member's sales and promotional efforts in connection with the operation of their Stretch Zone |
| Franchises through the joint pooling of funds for the creation and placement of advertising and |
| promotional campaigns and plans in the DMA. The DMA Cooperative will open a bank account in |
| its name with Bank of America into which advertising contributions are deposited and from which the |
| expenses incurred are paid. The Franchisor will be granted access to the account for monitoring |
| purposes. |
Source: Item 3 — Franchisee/Debtor's Warranties. (FDD pages 263–364)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, the DMA (Designated Marketing Area) Cooperative is created to enhance the sales and promotional activities of Stretch Zone franchisees within their designated marketing area. This is achieved through the pooling of funds to develop and implement advertising and promotional campaigns. The DMA Cooperative allows franchisees to jointly fund advertising efforts.
Stretch Zone franchisees contribute to the DMA Cooperative on a monthly basis, with contributions not exceeding 1% of their gross revenues. The initial contribution amount is determined during the cooperative's organizational meeting. These contributions are deposited into a Bank of America account managed by the DMA Cooperative, with Stretch Zone Franchising, LLC having access for monitoring purposes. The funds are then used for expenditures such as television and radio media placement, agency expenses, point-of-purchase materials, and administrative fees related to advertising.
Franchisees who are members of the DMA Cooperative have voting rights on matters affecting the allocation of funds for advertising, the nature and type of advertising, the determination of increases in member contributions, amendments to the cooperative's bylaws, the dissolution of the cooperative, and the election of officers. However, the officers of the DMA Cooperative make decisions on other operational matters and contracting for advertising production and placement. A franchisee's membership in the DMA Cooperative terminates if they transfer their franchise, their Franchise Agreement is terminated or expires, or they otherwise cease to be a Stretch Zone franchisee in good standing.