In the event of a conflict of laws, which state's provisions will prevail for a Stretch Zone franchise?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
RHODE ISLAND ADDENDUM TO FRANCHISE AGREEMENT
This Addendum to the Franchise Agreement is agreed to on between Stretch Zone Franchising, LLC, a Florida limited liability company ("we" "us" or "our") and ("you" or "your").
- The Rhode Island Securities Division requires that certain provisions contained in the Franchise Agreement be amended to be consistent with Rhode Island law, including the Franchise Investment Act, R. I. Gen. Law Ch. 395 Sec. 19-28.1-1 to 19-28.1-34 (the "Act"). To the extent that the Franchise Agreement contains provisions that are inconsistent with the Act, the provisions are amended:
(b) Governing Law
If the Franchise Agreement requires that it be governed by a state's law, other than the State of Rhode Island, to the extent that this law conflicts with the Act, the Act will control.
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 governing state law in the event of a conflict depends on the franchisee's location. Specifically, for franchisees in Rhode Island, the Rhode Island Addendum to the Franchise Agreement stipulates that if the Franchise Agreement requires that it be governed by a state's law other than Rhode Island, the Rhode Island Franchise Investment Act will take precedence to the extent that the other state's law conflicts with the Act. This ensures that Rhode Island franchisees receive the protections afforded to them under Rhode Island law.
This provision is designed to protect Stretch Zone franchisees in Rhode Island from potentially unfavorable terms in the standard franchise agreement that might conflict with Rhode Island's franchise laws. It addresses concerns related to venue, governing law, and release of claims, ensuring that Rhode Island law will control in these specific areas. This means that any litigation or arbitration must occur in Rhode Island, and franchisees cannot be forced to waive rights or claims protected by the Rhode Island Franchise Investment Act.
For prospective Stretch Zone franchisees in Rhode Island, this addendum provides an additional layer of legal protection. It is crucial for these franchisees to understand their rights under the Rhode Island Franchise Investment Act and how this addendum modifies the standard franchise agreement. Franchisees should consult with legal counsel to fully understand the implications of this addendum and how it affects their franchise agreement. This ensures compliance with local laws and protects the franchisee's interests within the state.