After ceasing operation of a Stretch Zone franchise, what are franchisees prohibited from doing with the Stretch Zone Intellectual Property?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
any trade name, assumed name or fictitious name registration of the Principal Trademark with respect to any Franchise Business to be conducted outside the Limited Protected Territory or any business within the Limited Protected Territory that is permitted by this Agreement. If you secure in any jurisdiction any rights to any of the Intellectual Property (or any other Intellectual Property) not expressly granted under this Agreement, you will immediately notify us and immediately assign to us all of your right, title and interest to the Intellectual Property (or any other Intellectual Property).
ARTICLE 6 - THE OPERATIONS MANUAL
Section 6.1 IN GENERAL
To protect our reputation and goodwill and to maintain uniform standards of operation under the Intellectual Property, you will conduct your Franchise Business in accordance with the Operations Manual. The Operations Manual is an integral part of this Agreement with the same effect as if fully stated in this Agreement.
Section 6.2 CONFIDENTIAL USE
- (a) Trade Secret. You will treat and maintain the Confidential Information as our confidential trade secrets except for information previously known or obtained through independent sources and found within the public domain. You must keep the Operations Manual in a secure area within the Premises. You will strictly limit access to the Confidential Information to your employees that have signed a Confidentiality and Non-Competition Agreement in the form included in the Operations Manual and to the extent they have a "need to know" in order to perform their duties. You will report the theft, loss or destruction of the Operations Manual immediately to us.
- (b) Unauthorized Use. You agree that, during and after the Initial Term, you, your Franchise Owners, Designated Representative, Regional Managers and employees will:
- (i) Not use the Confidential Information in any other business or capacity, including any derivative or spin-off of the Stretch Zone concept;
- (ii) Maintain the absolute secrecy and confidentiality of the Confidential Information during and after the Initial Term;
- (iii) Not make unauthorized copies of any portion of the Confidential Information disclosed or recorded in written or other tangible form; and
- (iv) Adopt and implement all procedures that we require to prevent unauthorized use or disclosure of, or access to, the Confidential Information.
- (v) Not modify, reverse engineer, decompile, create other works from or disassemble any of our or any of our Affiliates' Confidential Information, except as we permit in writing.
Section 6.3 PERIODIC REVISIONS
- (a) Changes to Manual. We will revise the Operation Manual and these standards, procedures, techniques and management systems periodically to meet changing conditions. You will comply with each new or changed provision beginning on the 30th day (or any longer time as we specify) after our written notice. We will base revisions to the Operations Manual on what we determine to be in the best interests of the Business System, our interest and the interest of our Franchisees, including promoting quality, enhancing goodwill, increasing efficiency, decreasing administrative burdens, or improving profitability.
- (b) Variances. Because complete and detailed uniformity under many varying conditions may not be possible or practical, we reserve the right, in our sole discretion and as we may deem to be in the best interests of all concerned in any specific instance, to vary standards for any Franchisee based on the circumstances then existing. You are not entitled to require us to grant to you a similar variation under this Agreement.
SECTION 6.4 PRIOR INFORMATION
You agree that all Confidential Information received before the Agreement Date was unknown to you except through our disclosure and that the marketing practices and operating procedures we develop and franchise to you for the operation of the Franchise Business are important for the success of the Business System.
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 the 2025 Stretch Zone Franchise Disclosure Document, franchisees face several restrictions regarding the use of Stretch Zone's intellectual property both during and after the termination of their franchise agreement. During the term, franchisees can only use the intellectual property for operating their Stretch Zone business at the approved premises. They are prohibited from using it in contracts, legal obligations, or in any way that could create liability for Stretch Zone. The franchisee must use Stretch Zone's Principal Trademark as the sole service mark and display it prominently.
After the franchise agreement terminates, the franchisee is still bound by confidentiality obligations. They cannot use confidential information in any other business, including derivatives of the Stretch Zone concept. Franchisees must maintain the secrecy of this information and avoid unauthorized copies. They also have to implement procedures to prevent unauthorized use or disclosure.
To further ensure a clear distinction post-termination, franchisees must modify their former premises to differentiate it from other Stretch Zone locations. This includes removing all Stretch Zone signage and logos. Until these changes are complete, they must display a sign indicating the business is no longer associated with Stretch Zone and inform customers of the same. Failure to comply allows Stretch Zone to enter the premises and make the necessary changes at the franchisee's expense.