Does the Stretch Zone Guarantor waive notice of the extension of any Guaranteed Obligation?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Waiver. The Guarantor irrevocably waives notice of the extension of any Guaranteed Obligation, or of the acceptance of this Guaranty, and protest, presentment, diligence, demand for payment, notice of default, nonpayment or dishonor of any Guaranteed Obligation, and any other notice except as expressly provided in this Guaranty.
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, the Guarantor does irrevocably waive notice of the extension of any Guaranteed Obligation. This waiver is part of a broader set of waivers that also includes notice of the acceptance of the Guaranty, protest, presentment, diligence, demand for payment, notice of default, nonpayment or dishonor of any Guaranteed Obligation, and any other notice except as expressly provided in the Guaranty. This means the Guarantor will not be formally notified if the obligations are extended.
This waiver has significant implications for anyone acting as a Guarantor for a Stretch Zone franchise. By waiving these notices, the Guarantor essentially agrees to be bound by any extensions or modifications to the Guaranteed Obligations without needing to be informed. This could create a situation where the Guarantor remains liable for a longer period or under altered terms than initially anticipated, without their direct knowledge or consent at the time of the change.
It is crucial for potential Stretch Zone franchisees and their Guarantors to fully understand the scope of these waivers. Guarantors should carefully consider the potential risks and seek legal counsel to fully grasp the implications before signing any agreements. This level of waiver is not uncommon in franchise agreements, as franchisors seek to streamline processes and maintain flexibility in managing the financial aspects of their franchise system. However, the specific terms and extent of the waivers can vary, so due diligence is essential.