Does the Stretch Zone franchise agreement expressly prohibit the franchisor or its affiliates from engaging in any activities they consider appropriate?
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, the franchise agreement does not expressly prohibit the franchisor or its affiliates from engaging in activities they deem appropriate. The FDD states that Stretch Zone and its affiliates retain the right to engage in any activities they consider appropriate, provided those activities are not expressly prohibited by the Franchise Agreement. This gives Stretch Zone considerable latitude in its business dealings.
This latitude includes establishing and operating units outside the franchisee's Limited Protected Territory, as well as Non-Traditional Locations within or outside that territory. Stretch Zone can also operate businesses similar or dissimilar to the franchised units, as long as these businesses are not primarily identified by the Stretch Zone trademarks or do not use the Stretch Zone Business System. Furthermore, Stretch Zone retains all rights related to its trademarks and associated products and services, allowing them to distribute these through any method they choose, unless specifically restricted in the franchise agreement.
Stretch Zone also has the right to acquire other businesses, even those providing similar or dissimilar products and services to the franchised units. After acquiring these businesses, Stretch Zone can franchise, license, or create other arrangements with them, regardless of their location. This broad reservation of rights allows Stretch Zone to adapt to market changes and pursue new business opportunities without being unduly restricted by the franchise agreement.
For a prospective franchisee, this means that Stretch Zone retains significant control over its business operations and future strategies. While the franchisee is granted a Limited Protected Territory, Stretch Zone can still operate or franchise other businesses that may compete with the franchisee outside of that territory. It is important for potential franchisees to carefully consider these provisions and understand the extent to which Stretch Zone can engage in activities that may impact their business.