Does the Stretch Zone Area Development Agreement require waiving the right to a jury trial?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Area Development Agreement | Summary |
|---|---|---|
| Area Development Agreement. You may not transfer the Area Development Agreement. | ||
| n. Our right of first | Not Applicable | Not Applicable |
| refusal to acquire | ||
| your business | ||
| o. Our option to | Not Applicable | Not Applicable |
| purchase your | ||
| business | ||
| p. Your death or | Not Applicable | Not Applicable |
| disability | ||
| q. Non-competition | Not Applicable | Not Applicable |
| covenants during the | ||
| term | ||
| r. Non-competition | Not Applicable | Not Applicable |
| covenants after the | ||
| agreement is | ||
| terminated or expires | ||
| s. Modification of the agreement | Section 9.2 | Your Area Development Agreement may not be modified without the consent of both you and us except: 1. We may change the contents of the Manuals; 2. We may modify the Business System; and 3. A court may modify any provision in accordance with applicable law. |
| t. Integration/ merger clause | Section 8.11 | Only the terms of the Area Development Agreement and other written agreements are binding (subject to applicable state law). Nothing in the Area Development Agreement or in any other related written agreement is intended to disclaim the representations we made in this FDD. Any representations or promises outside the FDD and the Area Development Agreement may not be enforceable. |
| u. Dispute resolution by arbitration or mediation1 | Section 9.1 | All disputes must be resolved first by informal dispute resolution and, if unsuccessful, by mediation and, if mediation is not successful, then by arbitration except claims involving: 1. The Intellectual Property; 2. Any lease or sublease of real property; 3. Your obligations upon termination or expiration of your Area Development Agreement; 4. Any transfers; 5. Matters involving claims of danger, health or safety; and 6. Requests for restraining orders, injunctions or similar procedures. You must waive your rights to a jury trial and claims for punitive damages. |
Source: Item 17 — ITEM -17 RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 65–73)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, the Area Development Agreement includes a provision that requires franchisees to waive their rights to a jury trial. Specifically, Item 17 outlines that all disputes must initially undergo informal resolution, then mediation, and finally arbitration if the prior steps are unsuccessful. However, there are exceptions to this arbitration requirement for claims involving intellectual property, real property leases, obligations upon termination or expiration, transfers, matters of health and safety, and requests for restraining orders or injunctions.
This waiver means that if a dispute arises concerning the Area Development Agreement, a Stretch Zone franchisee would not be able to pursue a resolution through a traditional court trial with a jury. Instead, they would be bound to resolve the dispute through arbitration, where a neutral arbitrator makes a binding decision. This process is generally faster and less expensive than a jury trial, but it also means the franchisee gives up the right to have their case decided by a jury of their peers.
It is important for prospective Stretch Zone franchisees to understand the implications of waiving their right to a jury trial. While arbitration can be more efficient, the decision of the arbitrator is typically final and not subject to appeal. Franchisees should consult with an attorney to fully understand the legal ramifications of this provision before signing the Area Development Agreement. This is a fairly standard practice in franchise agreements, but it is crucial to be aware of the specific terms and conditions.