What fee must a Stretch Zone franchisee pay to Stretch Zone for approving a transfer?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
- (vii) You will pay us the Transfer Fee to reimburse us for our costs in approving the transfer and in training the transferee.
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, a franchisee must pay a transfer fee to reimburse Stretch Zone for the costs associated with approving the transfer and training the new franchisee. This fee is required when a franchisee transfers their franchise to a third party, subject to several conditions.
These conditions include Stretch Zone not exercising its right of first refusal, the franchisee not being in default of any agreements, the transferee completing the application procedures, demonstrating the necessary skills and financial capacity, and signing the current franchise agreement. Additionally, the transferee must assume the lease obligations, and the franchisee must sign a Franchise Termination and Release Agreement.
It is important to note that the new Franchise Agreement signed by the transferee may differ from the original agreement, potentially including higher royalty and advertising fees, and a smaller protected territory. The transferee will also be responsible for completing the required training programs at their own expense. The specific amount of the transfer fee is not mentioned here, but it is intended to cover Stretch Zone's costs in approving the transfer and training the new franchisee.