What rights did Stretch Zone grant to Drew Brees regarding the Management Committee?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
laim the representations we made in this FDD. Any representations or promises outside the FDD and the Area Development Agreement may not be enforceable. | | u. Dispute resolution by arbitration or mediation1 | Section 9.1 | All disputes must be resolved first by informal dispute resolution and, if unsuccessful, by mediation and, if mediation is not successful, then by arbitration except claims involving: 1. The Intellectual Property; 2. Any lease or sublease of real property; 3. Your obligations upon termination or expiration of your Area Development Agreement; 4. Any transfers; 5. Matters involving claims of danger, health or safety; and 6. Requests for restraining orders, injunctions or similar procedures. You must waive your rights to a jury trial and claims for punitive damages. |
| Provision | Section in Area Development Agreement | Summary |
|---|---|---|
| v. Choice of forum1 | Section 9.1 | Subject to state law, any informal dispute resolution, |
| mediation or arbitration proceeding must be conducted | ||
| where our principal office is located |
Source: Item 18 — ITEM -18 PUBLIC FIGURES (FDD page 73)
What This Means (2025 FDD)
According to the 2025 Stretch Zone FDD, as part of a Celebrity Endorsement Agreement effective January 2021, Stretch Zone granted Drew Brees the right to be on the Management Committee. This agreement was made with Brees Company, Inc. (BCI), representing Drew Brees, the former NFL quarterback. In exchange for Brees' endorsement, Stretch Zone secured the right to use his name, likeness, and endorsement for marketing purposes.
In addition to the Management Committee rights, the initial agreement included a guaranteed minimum annual payment of $250,000 to BCI. Brees also received Unit Appreciation Rights, Area Development Rights for 20 franchises in specific locations (New Orleans, Indianapolis, and San Diego), and a Right of First Refusal for franchises in Orange County, California.
The agreement was amended in June 2023 to extend the term to December 31, 2028, increase the guaranteed minimum annual payment to $500,000, and issue certain Class C units of Stretch Zone's Parent company to Mr. Brees. The FDD does not elaborate on the specific powers or responsibilities granted to Drew Brees as a member of the Management Committee.