Does the Stretch Zone Franchise Agreement contain a liquidated damages clause?

According to the 2025 Stretch Zone Franchise Disclosure Document, the Franchise Agreement does contain a liquidated damages clause. This means that the agreement includes a provision that specifies the amount of monetary damages one party must pay to the other in the event of a breach of contract. However, the FDD also notes that under California Civil Code § 1671, certain liquidated damages clauses are unenforceable, which may impact franchisees in California.

For a prospective Stretch Zone franchisee, the inclusion of a liquidated damages clause means that if they breach the Franchise Agreement, they could be liable for a predetermined amount of damages. This amount is set in the contract itself, rather than being determined by a court after the breach occurs. It is important for franchisees to understand the circumstances under which these damages would be assessed and the potential amount they could be required to pay.

Given the reference to California Civil Code § 1671, prospective franchisees, particularly those in California, should carefully review the liquidated damages clause with legal counsel to understand its enforceability and implications under state law. The enforceability of such clauses can vary, and it's crucial to know your rights and obligations before signing the Franchise Agreement. Understanding this clause is essential for assessing the financial risks associated with the Stretch Zone franchise.