Can Stretch Zone establish Units outside 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 Units outside a franchisee's Limited Protected Territory. Specifically, Stretch Zone has the right to establish and operate Units, or grant rights to others to do so, at any location outside the Limited Protected Territory. This includes Non-Traditional Locations both within and outside the Limited Protected Territory.
This means that while a franchisee is granted a Limited Protected Territory, Stretch Zone can still establish other franchised or company-owned locations outside of that territory. These locations can be established on any terms and conditions that Stretch Zone deems appropriate. This also extends to businesses that are similar or dissimilar to Stretch Zone Units, as long as they are not primarily identified by the Stretch Zone Trademarks or do not use the Stretch Zone Business System.
Stretch Zone also retains 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. This includes providing 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, regardless of the method of distribution. Furthermore, Stretch Zone has the right to acquire other businesses providing similar or dissimilar products and services and franchise, license, or create other arrangements with respect to these businesses, regardless of their location.
For a prospective franchisee, this indicates that while they will have a Limited Protected Territory, Stretch Zone retains significant freedom to operate and expand outside of that territory. This could potentially lead to increased competition or market saturation in areas adjacent to the franchisee's territory. It is important for potential franchisees to understand the scope of their protected territory and the potential for Stretch Zone to establish additional Units or businesses nearby.