For a Stretch Zone franchise renewal, must the franchisee be entitled to continue occupying the premises for the entire renewal term, including renewal rights?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
- (vi) You must be entitled to continue to occupy the Premises for the entire Renewal Term including renewal rights or obtain our approval of a new location for the Franchise Business within the Limited Protected Territory, but not within the Limited Protected Territory of a Company-Owned Unit or Franchised Unit, in accordance with our relocation procedures stated in Section 1.5.
- (vii) You must renovate and modernize the Premises if they do not conform to our then-current Trade Dress requirements.
- (b) Our Right Not to Renew. If you have not met all of the conditions stated in Subsection 16.2(a), or if you have received 4 or more notices of default during the Initial Term, even if you cured the defaults, we may elect not to enter into a Renewal Franchise Agreement. Within 5 days after you receive our written notice that we have elected not to enter into a Renewal Franchise Agreement, you may request our permission for you to sell your Franchise Business. You will then have 180 days to sell the Franchise Business, subject to our right of first refusal. This notice will extend the Initial Term, as necessary, to the end of the 180-day period, unless we have other grounds to terminate the Initial Term). This transfer must comply with the provisions of Subsection 10.2(f) and all the other applicable terms of this Agreement. During this period, you must continue to operate your Franchise Business in accordance with the terms of this Agreement.
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, to be eligible for a renewal agreement, a franchisee must be entitled to continue occupying the premises for the entire renewal term, including any renewal rights. However, if the franchisee cannot continue occupying the premises, they can seek Stretch Zone's approval for a new location within their Limited Protected Territory. This new location cannot be within the Limited Protected Territory of a Company-Owned Unit or another Franchised Unit. The relocation must also adhere to Stretch Zone's relocation procedures outlined in Section 1.5 of the franchise agreement.
This condition ensures that Stretch Zone franchisees have a viable location for their business during the renewal term. It protects the brand's presence in the market and maintains consistent service for customers. The option to relocate with Stretch Zone's approval provides some flexibility if the original premises are no longer available or suitable.
However, franchisees must also renovate and modernize the premises to meet Stretch Zone's then-current Trade Dress requirements. Meeting these requirements can involve significant costs for the franchisee. If a franchisee fails to meet all renewal conditions or has received four or more default notices during the initial term, Stretch Zone reserves the right not to renew the franchise agreement. In such cases, the franchisee may have the option to sell the franchise business, subject to Stretch Zone's right of first refusal, within a 180-day period.