What does 'Affiliate' mean in the context of a Stretch Zone franchise agreement?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
"ADA" means a Stretch Zone Area Development Agreement signed by you or your Affiliate.
"Advertising Contributions" mean the payments described in Subsection 3.1(e).
- "Affiliate" means any Business Entity controlled by, controlling, or under common control with, us regardless of whether an Affiliate sells products or services to you or sells franchises in any line of business.
The term "Affiliate" also means any Affiliate of the Franchisee.
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 Stretch Zone's 2025 Franchise Disclosure Document, an 'Affiliate' refers to any business entity that controls, is controlled by, or is under common control with Stretch Zone Franchising, LLC. This definition applies regardless of whether the affiliate sells products or services to franchisees or is involved in selling franchises in any line of business. The term 'Affiliate' also extends to any affiliate of the franchisee.
For a prospective Stretch Zone franchisee, this definition is important for several reasons. It clarifies the scope of relationships that Stretch Zone has with other businesses and how those relationships might impact the franchise. For example, if Stretch Zone has an affiliate that supplies certain products or services, this could influence the franchisee's sourcing options or costs. Similarly, if an affiliate is involved in selling franchises, it could affect the availability of territories or the terms of the franchise agreement.
Understanding the definition of 'Affiliate' also helps franchisees interpret other sections of the Franchise Agreement and FDD. For instance, disclosures about potential conflicts of interest, restrictions on competition, or obligations related to confidentiality might reference affiliates. Therefore, knowing which entities fall under this definition is crucial for assessing the potential risks and benefits of investing in a Stretch Zone franchise.
In the broader context of franchising, it is common for franchisors to have affiliates that provide various services or support functions. However, the specific definition of 'Affiliate' and the implications for franchisees can vary. Therefore, prospective franchisees should carefully review the definition in the FDD and ask the franchisor for clarification if needed to fully understand the scope of these relationships.