Must a Stretch Zone franchisee sign a Franchise Termination and Release Agreement as part of a transfer?
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. |
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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 franchisee is required to sign a Franchise Termination and Release Agreement as part of the transfer process. Specifically, the selling franchisee must sign this agreement, which is attached as Exhibit N to the FDD.
This requirement is one of several conditions that Stretch Zone imposes for approving a transfer. Other conditions include providing written notice, ensuring the company does not exercise its right of first refusal, not being in default, having the transferee complete application procedures and training, and paying a $10,000 transfer fee. The transferee must also sign a new franchise agreement, which may contain materially different terms and conditions than the original agreement.
The Franchise Termination and Release Agreement likely releases Stretch Zone from any further liability or obligations related to the transferring franchisee's operation of the business. This is a standard practice in franchising to ensure a clean break between the franchisor and the outgoing franchisee, and to establish a fresh relationship with the new franchisee under the terms of the new franchise agreement. Prospective franchisees should carefully review Exhibit N to understand the full scope of the release and its implications for their rights and obligations upon transferring their Stretch Zone franchise.