Does Stretch Zone have any agreements that significantly limit their right to license the use of their trademarks to franchisees?

According to Stretch Zone's 2025 Franchise Disclosure Document, there are no agreements currently in effect that significantly limit their rights to license the use of their trademarks, intellectual property, and business system to franchise businesses in any manner material to a prospective franchisee. This means that Stretch Zone is not currently bound by any contracts that would prevent them from granting franchisees the right to use their trademarks and operate under their established business model. This is a positive indicator for potential franchisees, as it suggests that Stretch Zone has the full legal capacity to offer and support franchise opportunities.

However, the FDD also notes that while Stretch Zone is not aware of any superior prior rights or infringing uses that could materially affect a franchisee's use of the Principal Trademark, their trademark registration does not prohibit others from using the Principal Trademark (or confusingly similar variations) if those others had established prior rights in territories where neither Stretch Zone nor its franchisees have operated or advertised, and that are not within the natural zone of expansion. Therefore, Stretch Zone would be unable to prohibit the use of the Principal Trademark by others who had prior use of the Principal Trademark or confusingly similar variations of the Principal Trademark when they first used them. If others establish prior rights to the Principal Trademark in certain territories, Stretch Zone may be restricted in their ability to use and license the use of the Principal Trademark when expanding into those territories.

Furthermore, the FDD indicates that if Stretch Zone deems it advisable to modify or discontinue the use of the Principal Trademark or any of the other Intellectual Property, franchisees are liable for all expenses in substituting the modified or new Intellectual Property in their Franchise Business and are obligated to do so within 30 days of Stretch Zone's request. This could pose a financial burden on franchisees if a trademark modification is required.

Finally, the document states that under the Area Development Agreement, franchisees are not granted the right to use the Trademarks. The right to use the Trademarks can only be acquired by the execution of a separate Franchise Agreement for each Franchise Business to be opened and operated under the Development Agreement. This clarifies that an Area Development Agreement does not automatically grant trademark usage rights; a separate Franchise Agreement is required for each location.