Can Stretch Zone establish and operate businesses similar or dissimilar 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
Section 1.4 RIGHTS THAT WE MAINTAIN
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 deem appropriate that are not expressly prohibited by this Agreement, whenever and wherever we or they desire, including, but not limited to:
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 FDD, Stretch Zone retains specific rights regarding business activities. Stretch Zone has the right to engage in any activities that are not expressly prohibited by the agreement, whenever and wherever they desire. This includes activities conducted by any affiliates of Stretch Zone.
This means that Stretch Zone and its affiliates are not restricted from operating other businesses, whether similar to or different from Stretch Zone units, even within a franchisee's limited protected territory, as long as those activities are not explicitly forbidden in the franchise agreement. This clause provides Stretch Zone with considerable latitude to pursue various business ventures without necessarily infringing on the franchisee's protected territory, provided they do not violate the specific terms outlined in the agreement.
For a prospective franchisee, this implies that while they are granted a limited protected territory, Stretch Zone reserves the right to conduct other business activities, potentially including businesses that might compete indirectly or offer different services. It is important for franchisees to understand the scope of these retained rights and how they might impact their business. Franchisees should seek clarification on what activities are expressly prohibited to fully understand the potential competitive landscape within their territory.