Does the Stretch Zone franchisee retain ownership of their customer lists?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
| THIS ASSIGNMENT AGREEMENT is signed on between Stretch Zone Franchising, LLC, a Florida limited liability company ("we," "us" or "our") and ("you" or "your"). |
|---|
| BACKGROUND |
| A. |
| The parties are entering into a Stretch Zone Franchise Agreement on |
| (the "Franchise Agreement"). |
| B. |
| As a condition to signing the Franchise Agreement, we have required that you |
| assign to us all of your right, title and interest in the telephone numbers, telephone listings, |
| facsimile numbers, and telephone directory advertisements relating to the Stretch Zone |
| Franchise (the "Franchise Business") upon the expiration or termination of the Franchise |
| 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 Stretch Zone's 2025 Franchise Disclosure Document, franchisees are required to assign their rights to telephone numbers, listings, fax numbers, and directory advertisements related to the Stretch Zone franchise to the franchisor upon the expiration or termination of the Franchise Agreement. This assignment is a condition of signing the Franchise Agreement. The FDD does not specifically address the ownership of customer lists.
While the document explicitly states the assignment of telephone-related assets, it remains unclear whether Stretch Zone also requires franchisees to relinquish ownership or control of their customer lists upon termination or expiration of the franchise agreement. Customer lists are valuable assets for any business, as they represent established relationships and potential future revenue. The disposition of these lists can significantly impact a franchisee's ability to operate independently after the franchise agreement ends.
Given the lack of clarity in the FDD, prospective Stretch Zone franchisees should seek explicit clarification from the franchisor regarding the ownership and usage rights of customer lists. Specifically, they should inquire whether Stretch Zone claims any ownership or control over these lists, both during the term of the agreement and after its termination or expiration. Understanding Stretch Zone's policy on customer data is crucial for evaluating the long-term value and potential risks associated with the franchise opportunity.
It is common practice in the franchise industry for franchisors to have specific policies regarding customer data, ranging from shared ownership to complete franchisor control. Therefore, it is essential for potential franchisees to fully understand Stretch Zone's stance on this issue before making a final investment decision.