Where will arbitration occur for Stretch Zone Area Development Agreements, and who bears the costs?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
The Area Development Agreement requires binding arbitration. The arbitration will occur at Broward County, Florida with the costs being borne by the non-prevailing party. Prospective developers are encouraged to consult private legal counsel to determine the applicability of California and Federal laws (including Business and Professions Code Section 20040.5, Code of Civil Procedure Section 1281, and the Federal Arbitration Act) to any provisions of an Area Development Agreement restricting venue to a forum outside the State of California.
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, the Area Development Agreement requires binding arbitration to occur in Broward County, Florida. The costs of arbitration will be borne by the non-prevailing party. This means that whichever party does not win the arbitration case will be responsible for covering the arbitration expenses.
For prospective Stretch Zone developers in California, the FDD notes that if the Area Development Agreement requires litigation, arbitration, or mediation to be conducted in a forum other than the State of California, the requirement may be unenforceable under California law. The FDD encourages prospective developers to seek legal counsel to determine the applicability of California and Federal laws regarding venue restrictions to a forum outside of California.
For prospective Stretch Zone developers in Illinois, any provision in an Area Development Agreement that designates jurisdiction or venue in a forum outside of the State of Illinois is void. However, an Area Development Agreement may provide for arbitration to take place outside of Illinois. Therefore, the arbitration location of Broward County, Florida would be enforceable in Illinois.