What is the relationship between the Franchisor and the DMA Cooperative in the Stretch Zone Regional Advertising Cooperative Agreement?
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 Franchisor, Stretch Zone Franchising, LLC, has the right to establish a Regional Advertising Cooperative in any Designated Marketing Area (DMA). The DMA Cooperative is created to further the sales and promotional efforts of each Stretch Zone franchise within that DMA through pooled advertising funds. The Franchisor has specific rights and responsibilities outlined in the DMA Cooperative agreement.
Stretch Zone grants access to the DMA Cooperative's bank account for monitoring purposes. While the DMA Cooperative members (franchisees) vote on the allocation of funds, the type of advertising, and increases in contributions, any changes or amendments to the cooperative's bylaws that affect the Franchisor's interests must be approved by Stretch Zone. This ensures that the cooperative's activities align with the overall brand strategy and interests of the Franchisor.
Furthermore, Stretch Zone retains significant control over advertising materials. The DMA Cooperative must submit all advertising materials to Stretch Zone for approval, and upon submission, all rights to the advertising materials are assigned to the Franchisor. Stretch Zone has the exclusive right to demand changes or modifications to the advertising and owns all intellectual property rights related to it. The DMA Cooperative is granted a non-exclusive license to use the approved advertising solely in accordance with Stretch Zone's policies and procedures. This level of oversight allows Stretch Zone to maintain brand consistency and quality control across all advertising efforts within the DMA.
If a Stretch Zone franchisee fails to make required monthly contributions to the DMA Cooperative (up to 1% of gross revenues), the Franchisor has the right to terminate the Regional Advertising Cooperative Agreement and potentially the Franchise Agreement itself if payment is not made within 30 days of written demand. This clause underscores the importance of financial participation in the cooperative and the Franchisor's power to enforce compliance.