What is the purpose of the Regional Advertising Cooperative Agreement for Stretch Zone?
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 the 2025 Stretch Zone Franchise Disclosure Document, the purpose of the DMA (Designated Marketing Area) Cooperative is to enhance the sales and promotional activities of each Stretch Zone franchise. This is achieved through the collective pooling of funds to create and implement advertising and promotional campaigns within the DMA. The DMA Cooperative will maintain a bank account with Bank of America for depositing advertising contributions and paying related expenses, with Stretch Zone Franchising, LLC having access for monitoring purposes.
Stretch Zone Franchising, LLC creates the DMA Cooperative as an unincorporated association to further the sales and promotional efforts of Franchised and Company-Owned Outlets within the DMA. Members believe that a cooperative effort will best coordinate advertising and promotional campaigns in the DMA, following the terms of the DMA Membership Agreement and Bylaws.
Franchisees participating in the DMA Cooperative are required to contribute monthly, with contributions not exceeding 1% of their Gross Revenues. The initial contribution amount is determined at the organizational meeting, and adjustments can be made through a majority vote of the members at regular meetings. Funds collected by the DMA Cooperative are used for expenditures such as television and radio media placement, agency expenses, point-of-purchase materials, and administrative and professional fees, all subject to member approval and franchisor agreement.
This agreement remains effective as long as the member remains a Stretch Zone franchisee. Members are entitled to one vote within the DMA Cooperative on matters requiring a member vote, as detailed in the DMA Cooperative's Bylaws. Failure to make the required payments can result in penalties, including interest on late payments and potential termination of the agreement and the Franchise Agreement if payments are not made within a specified cure period.