What is the deadline for a Stretch Zone franchisee to notify the franchisor after filing a petition in bankruptcy?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Notice to Us. You will notify us within 3 days of the occurrence of any of the events described in Subsection 11.1(a).
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, a franchisee must notify Stretch Zone within 3 days of filing a petition in bankruptcy. This requirement is part of a broader set of obligations related to informing Stretch Zone about events that could impact the franchise.
Specifically, this notification requirement is triggered if the franchisee files a bankruptcy petition, if an involuntary bankruptcy petition is filed against them and not dismissed within 45 days, or if the franchisee consents to such a petition. This also applies if the franchisee is adjudicated bankrupt or faces proceedings for the appointment of a receiver.
This quick notification timeframe allows Stretch Zone to take timely action to protect its interests, which may include assessing the financial stability of the franchise location and ensuring continued operation or transfer of ownership. Failing to notify Stretch Zone within the specified 3-day period could potentially lead to further action by the franchisor, as it represents a breach of the franchise agreement.