Can a Stretch Zone Area Development Agreement be renewed or extended?

According to Stretch Zone's 2025 Franchise Disclosure Document, the Area Development Agreement cannot be renewed or extended. The table within Item 17 explicitly states "Not Applicable" for both the renewal or extension of the term and the requirements for you to renew or extend. This means that once the initial term of the Area Development Agreement expires, the franchisee does not have an option to continue the agreement under the same terms.

For a prospective Stretch Zone area developer, this lack of renewal option is a significant consideration. The term of the Area Development Agreement expires, unless earlier terminated, on the earlier of: (i) the date that the last Franchise Business required to be opened under the Development Schedule actually opens; or (ii) the date that such Franchise Business is required to be opened under the Development Schedule. Franchisees should carefully consider the initial term and development schedule to ensure they can fulfill their obligations within the allotted time. If the developer anticipates needing more time or wants the option to continue expanding beyond the initial term, this is not possible under the agreement as it stands.

Upon expiration or termination of the Area Development Agreement, all Area Development Rights cease. Stretch Zone is then free to open Company Owned Businesses or franchise Stretch Zone Franchises to others within your former Development Area but outside any Limited Protected Territories granted to you under Franchise Agreements for Franchise Businesses you are currently operating or are under construction, provided you are not otherwise in default under any Franchise Agreement. This means that the developer loses the exclusive rights to develop new Stretch Zone locations in the designated area, potentially leading to increased competition from other franchisees or company-owned locations. Franchisees should factor this into their long-term business plans and investment strategies.

While the Area Development Agreement itself cannot be renewed, franchisees retain all rights under the Franchise Agreements for the Franchise Businesses they have under lease, construction, or in operation at that time, as long as they are not otherwise in default under those Franchise Agreements. This provides some security for existing locations, but it does not guarantee the ability to expand further under the same Area Development terms. Therefore, prospective area developers should carefully evaluate the initial terms and conditions of the Area Development Agreement, including the development schedule and the scope of protected territories, to ensure they align with their long-term business goals.