Are the covenants in ARTICLE 13 of the Stretch Zone franchise agreement considered independent of other provisions?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
- (d) Tolling. You agree that the 24-month period will be tolled for any period during which you are in breach of the covenants or any other period during which we seek to enforce this Agreement.
- (e) Court Modification. If any court rules that the time, territory, scope or any other provision in this Section is an unreasonable restriction upon you, you agree that these provisions are not rendered void, but apply as to time, territory, scope or to any other extent that the court determines or indicates are reasonable restrictions under the circumstances involved.
Section 13.2 INDEPENDENT COVENANTS; THIRD PARTY BENEFICIARIES
- (a) Independent Covenants. The parties agree that the covenants in this ARTICLE are independent of any other provision of this Agreement. You agree that the existence of any claim you may have against any affiliate or us under this Agreement or otherwise, is not a defense to our enforcement of these covenants.
- (b) Third Party Beneficiaries. The parties agree that all other Franchisees are third party beneficiaries of the terms of Section 13.1. Another Franchisee has the right to enforce these covenants at its expense without our joinder or participation, if we are unwilling or unable to enforce these covenants, but without any liability to the Franchisee on our part.
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, the covenants outlined in ARTICLE 13 of the franchise agreement are explicitly defined as independent. This means that a Stretch Zone franchisee cannot use any claims they might have against the franchisor or its affiliates as a defense if Stretch Zone seeks to enforce these specific covenants. This provision ensures that Stretch Zone can enforce these covenants without being hindered by unrelated disputes or claims the franchisee may raise.
This independence has significant implications for a prospective Stretch Zone franchisee. It means that even if the franchisee believes Stretch Zone has breached the agreement in some way, they are still obligated to adhere to the covenants in ARTICLE 13. Failure to do so could result in enforcement actions by Stretch Zone, regardless of the franchisee's claims. This clause is designed to protect Stretch Zone's interests by ensuring compliance with key provisions, such as those related to non-competition or confidentiality.
Furthermore, the Stretch Zone franchise agreement specifies that all other franchisees are considered third-party beneficiaries of Section 13.1. This gives other franchisees the right to enforce these covenants at their own expense if Stretch Zone is unwilling or unable to do so. This arrangement empowers franchisees to protect their interests and the integrity of the Stretch Zone system, even without direct intervention from the franchisor. However, the enforcing franchisee bears the costs of enforcement and Stretch Zone assumes no liability in such actions.
Additionally, the agreement addresses potential court modifications, stating that if a court finds any provision in Section 13 to be an unreasonable restriction, the provisions are not voided entirely. Instead, they are to be applied to the extent that the court deems reasonable under the circumstances. This ensures that the covenants remain enforceable to the fullest extent possible, even if some aspects are deemed overly restrictive. This flexibility allows Stretch Zone to maintain some level of protection while complying with legal standards of reasonableness.