Can Stretch Zone establish businesses similar to Stretch Zone Units that are not primarily identified by the Trademarks within the Limited Protected Territory?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
We (and any Affiliates that we may have from time to time) will, at all times, have the right to engage in any activities that we or they consider appropriate that are not expressly prohibited by the Franchise Agreement, whenever and wherever we or they desire, including:
- (a) establishing and operating, and granting rights to others to establish and operate, on any terms and conditions that we consider appropriate, Units (as applicable) at any locations outside the Limited Protected Territory and Non-Traditional Locations within or outside the Limited Protected Territory;
- (b) establishing and operating, and granting rights to others to establish and operate, on any terms and conditions that we consider appropriate, any businesses that are similar or dissimilar to Units that either are not primarily identified by the Trademarks or do not use the Business System at any locations, whether within or outside the Limited Protected Territory;
- (c) exercising all rights relating directly or indirectly to the Trademarks, and all products and services associated with any of the Trademarks, in connection with any methods of distribution, except as specifically stated in the first paragraph of this Section. This includes providing, and granting rights to others to provide (except as specifically stated in the first paragraph of this Section), products and services to customers and other third parties that are similar or dissimilar to, or competitive with, any products and services provided at Units, whether identified by the Trademarks or other trademarks or service marks, regardless of the method of distribution (including through our Website, other retail outlets, shipping and delivery), including temporary locations, such as events occurring for a limited duration; and
- (d) acquiring the assets or ownership interests of, or being acquired (regardless of the form of transaction) by, one or more businesses providing products and services similar or dissimilar to those provided at Units, and franchising, licensing or creating other arrangements with respect to these businesses once acquired, wherever these businesses (or the franchisees or licensees of these businesses) are located or operating, whether within or outside the Limited Protected Territory.
Source: Item 12 — ITEM -12 TERRITORY (FDD pages 54–58)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, Stretch Zone retains the right to establish and operate businesses, or grant others the right to do so, that are similar or dissimilar to Stretch Zone Units. These businesses can operate without being primarily identified by the Stretch Zone trademarks or using the Stretch Zone business system, and they can be located either within or outside a franchisee's Limited Protected Territory. This means that even within a franchisee's protected area, Stretch Zone could potentially operate or franchise a similar business under a different brand or without using the Stretch Zone system.
Stretch Zone also retains all rights related directly or indirectly to its trademarks, including the ability to provide or grant rights to others to provide products and services that are similar or competitive to those offered at Stretch Zone Units. This can be done under any trademark, and through any method of distribution, including online sales, retail outlets, shipping, and temporary locations. The only exception to this is stated in the first paragraph of Item 12, which discusses the franchisee's Limited Protected Territory.
Furthermore, Stretch Zone has the right to acquire businesses that offer similar or dissimilar products and services to Stretch Zone Units. After acquiring these businesses, Stretch Zone can franchise, license, or create other arrangements with them, regardless of whether they are located within or outside a franchisee's Limited Protected Territory. This broad reservation of rights allows Stretch Zone significant flexibility in its business operations and potential expansion, even if it means competing with its own franchisees.