When does the Royalty Fee payment obligation begin for a Stretch Zone franchise?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
| Typeof Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee1 | 7% of Gross Revenues Beginning on the first full calendar month, however, you must pay a minimum monthly Royalty Fee of $900. | Deducted from ClubReady remittances twice weekly2 | “Gross Revenues” means the entire amount of all your revenues generated from the ownership or operation of the Franchise Business as defined in the Franchise Agreement. |
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, the Royalty Fee is 7% of Gross Revenues, with a minimum monthly payment of $900. The Royalty Fee payment obligation begins on the first full calendar month of operation. Gross Revenues are defined as the total revenue generated from the operation of the Franchise Business.
Stretch Zone deducts Royalty Fee payments from ClubReady remittances twice weekly. Franchisees are required to open a separate operating account for the Franchise Business and cooperate with Stretch Zone to implement the Payment System within 15 days before the Opening Date. All Gross Revenues must be deposited into the operating account within 1 business day of receipt.
Franchisees cannot initiate payments through the ClubReady Electronic Payment System, but Stretch Zone can initiate payments for invoices that are due. This system ensures that Stretch Zone has a direct mechanism for collecting fees, but it also places the franchisee at a disadvantage, as they cannot control the timing or amount of deductions. Franchisees should ensure they understand how the ClubReady system works and how to reconcile payments to avoid discrepancies.