What is the Stretch Zone franchisee/debtor required to pay when due regarding the collateral?

According to Stretch Zone's 2025 Franchise Disclosure Document, the franchisee/debtor is obligated to pay all taxes and assessments on the collateral, its operation, or its use when they are due. This also includes discharging or paying any taxes, liens, security interests, or other encumbrances levied or placed against the collateral. This requirement ensures that the collateral remains free from any claims that could jeopardize Stretch Zone's security interest in it.

This provision protects Stretch Zone's interest in the collateral by ensuring that the franchisee maintains the collateral in good standing and free from any financial burdens that could lead to its loss or seizure. For a prospective franchisee, this means budgeting for and diligently paying all applicable taxes, assessments, and other charges related to the collateral to avoid defaulting on their obligations to Stretch Zone.

Furthermore, the franchisee must also cover the costs and expenses associated with perfecting and protecting Stretch Zone's security interest. This includes fees for preparing and filing financing statements, continuation statements, and other related documents. This obligation ensures that Stretch Zone's security interest is properly documented and legally protected, adding another layer of financial responsibility for the franchisee.

In practical terms, a Stretch Zone franchisee needs to be aware of these ongoing financial obligations related to the collateral, as failure to meet them could result in a default under the security agreement and potential loss of the collateral. Therefore, franchisees should maintain meticulous records of all payments related to the collateral and promptly address any issues that may arise to avoid jeopardizing their franchise operations.