Under what condition will Stretch Zone establish a regional advertising cooperative?

According to Stretch Zone's 2025 Franchise Disclosure Document, Stretch Zone has already established two advertising cooperatives. If a cooperative is formed in the Designated Marketing Area (DMA) where a company-owned unit's limited protected territories are located, that unit must join the advertising cooperative. Company-owned units will have the same voting power as franchised units on all matters, including fees. Franchisees are obligated to contribute to the advertising cooperative, but this contribution will not exceed 2% of monthly Gross Revenues and will be credited against the franchisee's obligation for Local Advertising.

This means that if a Stretch Zone franchisee's location falls within a DMA where an advertising cooperative exists, they are required to participate and contribute financially. The contribution is capped at 2% of monthly gross revenues, providing some predictability for budgeting purposes. The funds contributed to the cooperative will offset the franchisee's local advertising obligations, which could simplify their marketing efforts.

It is important for prospective Stretch Zone franchisees to understand the implications of joining an advertising cooperative. While it provides a structured approach to regional advertising, it also means relinquishing some control over their advertising spend. Franchisees should inquire about the existing advertising cooperatives, their performance, and how the funds are managed to make an informed decision about the potential benefits and drawbacks of this arrangement.