How does Stretch Zone recognize revenue from the Media Fund fees?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
ining per person per day. Revenue is recognized upon completion of the training.
Media Fund Fees:
The Company has established a Media Fund. The Company uses the media funds to create various advertising, marketing and promotional materials deemed beneficial. Media fund revenue is recognized as a percentage of gross sales and is recognized as received throughout the year from the franchisees. An initial amount of $500 per
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 company recognizes revenue from the Media Fund fees as a percentage of gross sales. This revenue is recognized as it is received throughout the year from franchisees.
Initially, Stretch Zone required a $500 payment per franchise to start the Media Fund. This initial amount is treated as deferred revenue, meaning it is not immediately recognized as revenue but is instead recognized over time.
In practice, this means that a portion of the franchisee's gross sales is allocated to the Media Fund, and Stretch Zone recognizes this portion as revenue throughout the year as they receive it. The initial $500 payment is not recognized immediately but is instead recognized over the life of the franchise agreement.