What are the franchisee's duties as outlined in Article 4 of the Stretch Zone agreement?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
4. Right to Cure and Take Occupancy.
- (a) If the Tenant/Franchisee defaults under the Lease, the Franchisor may (but is under no obligation to), within 30 days after receipt of written notice from the Landlord, cure the default (or a longer period of time if the default is not capable of being cured within 30 days and the Franchisor is diligently proceeding to cure the default).
If the Franchisor cures the Tenant/Franchisee's default, the Franchisor has the right to occupy the Premises and operate the Franchise Business.
The Tenant/Franchisee is deemed to have assigned the Lease to the Franchisor, but the Tenant/Franchisee and any guarantors are not released from their obligations under the Lease.
From and after the deemed assignment, the Franchisor will assume and perform all of the obligations of the Tenant/Franchisee under the Lease until the Franchisor is released in accordance with Subsection 4(b).
- (b) The Franchisor may assign the Lease to another Stretch Zone Franchisee with the Landlord's written approval of the new tenant/franchisee.
The Landlord will not unreasonably withhold, delay or condition its approval of the new tenant/franchisee.
Upon the permitted assignment by the Franchisor to the new tenant/franchisee, the Franchisor is released from all further obligations under the Lease.
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- Franchisor's Rights Upon Termination or Expiration of Franchise Agreement. The Landlord acknowledges that any landlord's lien or security interest does not include any property of the Tenant/Franchisee that includes any items bearing the Franchisor's trademarks including the signage and proprietary trade dress.
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, Article 4 outlines the franchisor's right to cure a franchisee's default under a lease and take occupancy of the premises. If a Stretch Zone franchisee defaults on their lease, the franchisor has the option, but not the obligation, to cure the default within 30 days of receiving written notice from the landlord. This period may be extended if the default requires more than 30 days to resolve, provided the franchisor is actively working to correct the issue.
Should Stretch Zone cure the franchisee's default, they have the right to take over the premises and operate the franchise business. The franchisee is then considered to have assigned the lease to the franchisor. However, the original franchisee and any guarantors remain responsible for their obligations under the lease. From the point of assignment, the franchisor assumes the franchisee's obligations until they are released as described in the agreement.
Stretch Zone also has the option to assign the lease to another franchisee, subject to the landlord's written approval, which cannot be unreasonably withheld, delayed, or conditioned. Upon assigning the lease to a new franchisee with the landlord's permission, Stretch Zone is released from any further obligations under the lease. Additionally, the landlord acknowledges that any existing landlord's lien or security interest does not extend to items bearing Stretch Zone's trademarks, including signage and proprietary trade dress, which are the property of the franchisee.