In a Stretch Zone franchise transfer, must the transferee assume all of the franchisee's obligations, including the lease?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
to state law, any informal dispute resolution, | | | | mediation or arbitration proceeding must be conducted | | | | where our principal office is located when the demand is | | | | requested. Any litigation to enforce the Area | | | | Development Agreement must be filed in the courts | | | | where our principal office is located when litigation is | | | | filed (currently Broward County, Florida). | | w. Choice of law1 | Section 9.1 | Except to the extent governed by the United States | | | | Trademark Act of 1946, the United States Copyright Act | | | | or the United States Arbitration Act, , and subject to | | | | applicable state law, the Development Agreement is | | | | interpreted under the laws of Florida. |
| Provision | Section in Franchise Agreement | Summary |
|---|
Source: Item 17 — ITEM -17 RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 65–73)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, a transferee must properly assume all of the franchisee's obligations, including the lease, to be approved for a franchise transfer. This requirement is one of several conditions that must be met for Stretch Zone to approve the transfer.
Other conditions for approval include providing written notice to Stretch Zone, ensuring Stretch Zone does not exercise its right of first refusal, and confirming the franchisee is not in default under any agreement with Stretch Zone or its affiliates. The transferee must also complete Stretch Zone's application procedures, be interviewed and approved by Stretch Zone, and sign a new franchise agreement, which may contain materially different terms and conditions than the original agreement. However, the transferee will not have to pay a new initial franchise fee.
Additionally, either the franchisee or the transferee must pay a transfer fee of $10,000. The franchisee must also sign a Franchise Termination and Release Agreement. Finally, the transferee must successfully complete Stretch Zone's Franchisee Training Program and other then-current training requirements, and both parties must sign Stretch Zone's transfer form. These stipulations ensure that any new franchisee is fully vetted, trained, and financially committed to the Stretch Zone system, while also protecting Stretch Zone's interests and brand standards.