What is the role of the 'Member' in the Stretch Zone Regional Advertising Cooperative Agreement?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
ton | Pending | | Wisconsin | May 1, 2025 |
EXHIBIT P – FORM OF REGIONAL ADVERTISING COOPERATIVE AGREEMENT
REGIONAL ADVERTISING COOPERATIVE AGREEMENT
| 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. |
3. MEMBERSHIP AND CONTRIBUTIONS.
(a) Qualification. Membership is open to all Stretch Zone Franchisees who are in good standing with Franchisor in the DMA and who sign this Agreement as required by the Franchise Agreement.
- TERM. This Agreement remains in effect until the Member ceases to be a Stretch
Zone Franchisee.
- (b) Voting Rights. The Member is entitled to 1 vote within the DMA Cooperative on each matter that is required to be submitted to a vote of the Members as described in Article 3, Section 3 of the attached Bylaws of the DMA Cooperative.
- (c) Contributions. The Member will contribute to the DMA Cooperative on a monthly basis, an amount not to exceed 1% of its Gross Revenues. The initial amount of monthly Contributions will be determined at the organizational meeting of the Members. All payments will be made through the ClubReady Electronic Payment system described in Section 3.3 of the Franchise Agreement. The amount of monthly Contributions to the DMA Cooperative will be reviewed and revised accordingly by majority vote of the Members at any regular meeting of the Members as provided in Article 4, Section 1 of the Bylaws.
- (d) Delinquent Payments. All late payments accrue interest at the rate of 1.5% per month beginning the date payment was due until fully paid or at the highest rate permitted by applicable state law, whichever is less, calculated on a daily basis.
- (e) Failure to Make Payments. If the Member fails to make 2 or more consecutive monthly contributions to the DMA Cooperative, the Franchisor may elect to terminate this Agreement and the Franchise Agreement for the Franchise Business if payment is not made within 30 days of receipt of the Franchisor's written demand for payment. If the delinquent payments are not made within the 30-day cure period, the Franchisor may immediately terminate this Agreement and the Franchise Agreement for the Franchise Business upon notice to the Member without providing any additional time to cure.
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- ALLOCATION OF PROCEEDS.
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 'Member' in the Regional Advertising Cooperative Agreement refers to the franchisee operating a Stretch Zone business within a Designated Marketing Area (DMA). The Member, as a franchisee, enters into this agreement with Stretch Zone Franchising, LLC (the Franchisor) and the DMA Cooperative to pool funds for regional advertising and promotional efforts. This cooperative aims to enhance each member's sales and promotional activities.
The Member's responsibilities include contributing to the DMA Cooperative on a monthly basis, with contributions not exceeding 1% of their Gross Revenues. The initial contribution amount is determined at the organizational meeting, and adjustments can be made through a majority vote of the members. Payments are processed via the ClubReady Electronic Payment system, as outlined in the Franchise Agreement. The Member also has voting rights within the DMA Cooperative, with each member entitled to one vote on matters requiring a member vote, as detailed in the DMA Cooperative's Bylaws.
Failure to make timely payments can result in penalties, including interest on late payments at a rate of 1.5% per month. If a member fails to make payments for two or more consecutive months, Stretch Zone has the option to terminate the Regional Advertising Cooperative Agreement and the Franchise Agreement if the payments are not made within 30 days of written demand. The funds collected by the DMA Cooperative are used for expenditures such as television and radio media placement, agency expenses, point-of-purchase materials, and administrative fees, all subject to member approval and franchisor agreement.
Membership in the DMA Cooperative is open to all Stretch Zone franchisees in good standing within the DMA who sign the agreement. The agreement remains effective as long as the member continues to be a Stretch Zone franchisee. The Member is entitled to vote on all matters affecting the allocation of funds for advertising, the nature and type of advertising, increases in member contributions, amendments to the Bylaws, the dissolution of the DMA Cooperative, and the election of officers. This ensures that franchisees have a say in how advertising funds are spent and how the cooperative is run.