Can Stretch Zone require a Stretch Zone franchisee to pay cash in advance for shipments?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 3.2 PAYMENT SCHEDULE
Royalty Fees, Technology Fees, training fees, Advertising Contributions and Fines are automatically billed and paid when are due by processing through our POS system. If we do not specify a due date, these amounts are due upon receipt of our invoice. Any payment or report not actually received by us on or before the due date is overdue. All payments will be processed through our POS system.
Source: Item 8 — Receipts. Any sale made must be in compliance with § 683(8) of the Franchise Sale Act (N.Y. Gen. Bus. L. § 680 et seq.), which describes the time period a Franchise Disclosure Document (offering prospectus) must be provided to a prospective franchisee before a sale may be made. New York law requires a franchisor to provide the Franchise Disclosure Document at the earliest of the first personal meeting or ten (10) business days before the execution of the franchise or other agreement or the payment of any consideration that relates to the franchise relationship. (FDD pages 99–263)
What This Means (2025 FDD)
Based on the 2025 Stretch Zone Franchise Disclosure Document, the document does not specify whether Stretch Zone can require franchisees to pay cash in advance for shipments. However, Section 3.2 addresses payment schedules for various fees. It states that Royalty Fees, Technology Fees, training fees, Advertising Contributions and Fines are automatically billed and paid through the POS system. If Stretch Zone does not specify a due date for these amounts, they are due upon receipt of the invoice. Any payment or report not received by Stretch Zone on or before the due date is considered overdue, and all payments will be processed through the POS system.
Because the FDD does not explicitly address the payment terms for shipments of products or supplies, it remains unclear whether Stretch Zone can mandate cash in advance for these items. The existing information focuses on fees and contributions that are managed through the POS system, suggesting a structured billing and payment process for those specific categories.
A prospective Stretch Zone franchisee should seek clarification from the franchisor regarding the payment policies for shipments of products and supplies. Specifically, they should inquire whether cash in advance is ever required, and if so, under what circumstances. Understanding these payment terms is crucial for managing cash flow and budgeting effectively as a franchisee.