What does the Regional Advertising Cooperative Agreement aim to establish for Stretch Zone franchisees?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
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 Regional Advertising Cooperative Agreement, also referred to as the DMA Cooperative, is designed to further the sales and promotional efforts of Stretch Zone franchisees. It achieves this by creating a framework for franchisees within a Designated Marketing Area (DMA) to pool their funds. These pooled funds are then used to develop and implement joint advertising and promotional campaigns. The DMA Cooperative will maintain a bank account for depositing advertising contributions and paying related expenses, with Stretch Zone Franchising, LLC having access for monitoring purposes. This cooperative effort allows Stretch Zone franchisees to coordinate their advertising strategies and maximize their impact within their respective markets.
Each Stretch Zone franchisee who is a member of the DMA Cooperative is entitled to one vote on matters that require a member vote, as detailed in the DMA Cooperative's Bylaws. These matters include the allocation of funds for advertising, the nature and type of advertising to be placed, and any changes to member contributions. This ensures that franchisees have a say in how their advertising dollars are spent and what types of campaigns are pursued.
Franchisees contribute to the DMA Cooperative on a monthly basis, with contributions not exceeding 1% of their gross revenues. The initial amount is determined at the organizational meeting, and adjustments can be made by a majority vote of the members at regular meetings. This contribution structure allows for a consistent and collaborative approach to regional advertising, ensuring that all franchisees are invested in the success of the cooperative's efforts. The agreement remains in effect as long as the franchisee remains a Stretch Zone franchisee in good standing.