Does Stretch Zone have the right to establish a regional advertising cooperative in any DMA?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
curity Agreement, and authorize us to record the UCC-1 Financing Statement and Rider included in Exhibit J.
REFUNDABILITY
All fees are nonrefundable.
UNIFORMITY
The expenses in this ITEM are uniformly imposed for persons currently offered a Franchise Business and/or Area Development Rights.
ADVERTISING COOPERATIVES – VOTING POWER OF COMPANY-OWNED UNITS
As of the date of this Disclosure Document, we have established two advertising cooperatives. Once an advertising cooperative is formed, Company-Owned Units whose limited protected territories are located within the DMA of the advertising cooperative must join the advertising cooperative and will have the same voting power as Franchised Units on all matters, including fees. The obligation of each Unit to contribute to an advertising cooperative (if formed in the applicable DMA) will not exceed 2% of monthly Gross Revenues. We will credit these contributions against your obligation for Local Advertising.
Source: Item 6 — ITEM -6 OTHER FEES (FDD pages 16–33)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, Stretch Zone has the right to establish advertising cooperatives. Once an advertising cooperative is formed in a Designated Market Area (DMA), all company-owned units within that DMA must join. These company-owned units have the same voting power as franchised units on all matters, including fees.
The obligation for each Stretch Zone unit to contribute to an advertising cooperative, if formed in their DMA, will not exceed 2% of monthly Gross Revenues. These contributions will be credited against the franchisee's obligation for local advertising. A DMA is defined as a geographic area by Nielsen Media Research Company as a group of counties that make up a particular television market.
This means that as a Stretch Zone franchisee, you may be required to participate in a regional advertising cooperative if one is established in your DMA. Your contribution to this cooperative is capped at 2% of your monthly gross revenues, and this contribution will offset your local advertising obligations. It is important to note that company-owned units within the DMA will also participate and have equal voting power in the cooperative.