Under what condition are all initial fees for a Stretch Zone franchise deferred in Illinois, and why?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
our pre-opening obligations to you under a Franchise Agreement for the 1st Franchise Business and you are open for business.
IN WITNESS WHEREOF, the parties have signed and delivered this Addendum on the day and year first written.
| FRANCHISOR: | DEVELOPER: | | |----------------------------------------------------------------------|-------------------|--| | STRETCH ZONE FRANCHISING LLC, a | (IF ENTITY): | | | Florida limited liability company | | | | By: | [Name] | | | Tony Zaccario, CEO and President | By: | | | Date:, 20 | Name: Title: Date:, 20 (IF INDIVIDUALS): [Signature] [Print Name] Date:, 20 | | | | [Signature] [Print Name] Date:, 20 | |  of the Franchise Sale Act (N.Y. Gen. Bus. L. § 680 et seq.), which describes the time period a Franchise Disclosure Document (offering prospectus) must be provided to a prospective franchisee before a sale may be made. New York law requires a franchisor to provide the Franchise Disclosure Document at the earliest of the first personal meeting or ten (10) business days before the execution of the franchise or other agreement or the payment of any consideration that relates to the franchise relationship. (FDD pages 99–263)
What This Means (2025 FDD)
According to the 2025 Stretch Zone Franchise Disclosure Document, for franchisees in Illinois, all initial fees are deferred until Stretch Zone has fulfilled all pre-opening obligations and the franchisee is open for business. This deferral is specifically imposed by the Illinois Attorney General's Office due to Stretch Zone's financial condition. This condition is outlined in the Illinois Addendum to both the Area Development Agreement and the Franchise Agreement.
For prospective Stretch Zone franchisees in Illinois, this deferral of initial fees offers a significant benefit. It alleviates the upfront financial burden, allowing the franchisee to delay payment until the business is ready to operate. This can be particularly helpful in managing initial capital and cash flow during the critical startup phase. The initial franchise fee is $59,500, which is deferred until the franchisee is open for business.
However, it's important to note that this deferral is directly linked to Stretch Zone's financial condition as assessed by the Illinois Attorney General. While this protects franchisees in the short term, it also signals a potential risk factor to consider. Prospective franchisees should conduct thorough due diligence to understand the implications of Stretch Zone's financial health on the long-term viability and support they can expect from the franchisor.
This type of fee deferral is not typical in the franchise industry. Usually, initial franchise fees are paid upfront to secure the territory and begin the training and setup process. The Illinois Attorney General's intervention suggests a unique situation that requires careful consideration by anyone looking to invest in a Stretch Zone franchise in Illinois. Franchisees should seek legal and financial advice to fully understand the terms of the deferral and its potential impact.