What fee does Stretch Zone charge if a franchisee attempts to transfer without consent?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
- (h) Transfer Without Our Consent. Any attempted transfer by you without our prior written consent or otherwise not in compliance with the terms of this Agreement is void. We will consider that your interest in this Agreement has been voluntarily abandoned giving us the right to elect either to deem you in non-curable default and terminate this Agreement or to collect from you and the Guarantors a fee equal to 2 times the Transfer Fee.
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 Stretch Zone's 2025 Franchise Disclosure Document, if a franchisee attempts to transfer their franchise without obtaining prior written consent from Stretch Zone, or if the transfer does not comply with the terms of the Franchise Agreement, the attempted transfer is considered void. In such cases, Stretch Zone has the right to deem the franchisee in non-curable default and terminate the agreement. Alternatively, Stretch Zone can choose to collect a fee from the franchisee and any guarantors. This fee is equal to two times the standard Transfer Fee.
This policy serves to protect Stretch Zone's interests by ensuring that all franchise transfers meet their standards and receive proper approval. By imposing a significant fee for unauthorized transfers, Stretch Zone discourages franchisees from circumventing the required transfer process. This process likely includes evaluating the transferee's qualifications, financial stability, and commitment to adhering to Stretch Zone's operational standards.
For a prospective Stretch Zone franchisee, this means that any attempt to sell or transfer the franchise must be done in full compliance with the terms outlined in the Franchise Agreement. Failure to do so could result in substantial financial penalties or even termination of the franchise agreement. It is crucial to understand the transfer requirements and obtain written consent from Stretch Zone before proceeding with any transfer to avoid these consequences. Franchisees should carefully review the transfer provisions in their agreement and consult with legal counsel if needed.