Under what conditions can Stretch Zone terminate the collection and disbursement of Advertising Contributions and the Media Fund?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
- (f) Termination of Expenditures. We maintain the right to terminate the collection and disbursement of the Advertising Contributions and the Media Fund. Upon termination, we will disburse the remaining funds to existing Franchised Units and Company-Owned Units on a pro-rata basis based on their relative amount of contributions.
Source: Item 8 — Receipts. Any sale made must be in compliance with § 683(8) 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, Stretch Zone retains the right to terminate the collection and disbursement of Advertising Contributions and the Media Fund. If Stretch Zone chooses to terminate these activities, the remaining funds will be disbursed to existing Franchised Units and Company-Owned Units. The disbursement will be on a pro-rata basis, meaning each unit will receive a portion of the funds proportional to their contributions.
This provision gives Stretch Zone significant flexibility in managing the advertising and marketing strategy for the franchise system. While franchisees are required to contribute to the Media Fund, Stretch Zone can decide to discontinue the fund and its associated activities. The pro-rata disbursement ensures that franchisees receive a return of the remaining funds based on their contributions, which is a common practice in franchising when advertising funds are terminated.
For a prospective Stretch Zone franchisee, this means that the advertising contributions they make are not necessarily guaranteed to be used for ongoing advertising campaigns. While the funds are intended for the benefit of all units contributing to the Media Fund, Stretch Zone has the discretion to end the program. It is important for potential franchisees to understand this aspect of the agreement and to consider how it might impact their local marketing efforts if the Media Fund is discontinued. Franchisees should inquire about the conditions under which Stretch Zone might consider terminating the Media Fund and what factors would influence that decision.