Who is the Stretch Zone Guaranty binding upon?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
| by (the "Guarantor"). |
|---|
| INTRODUCTION |
| A. |
| Pursuant to a Stretch Zone Franchise Agreement dated as of |
| (the "Franchise Agreement"), Stretch Zone Franchising, LLC (the "Franchisor") is granting to |
| , a (the "Franchisee") the right to operate the Franchise |
| Business located at the address specified therein. |
| B. |
| The Guarantor represents and warrants to the Franchisor that s/he will benefit from |
| the Franchisee's execution of the Franchise Agreement. |
| C. |
| The Franchisor has declined to enter into the Franchise Agreement and other |
| related agreements (collectively, the "Agreements") with the Franchisee unless the Guarantor |
| signs and delivers this Guaranty to the Franchisor. |
| TERMS |
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 the 2025 Stretch Zone Franchise Disclosure Document, the Guaranty is binding upon the Guarantor. The Guarantor warrants to Stretch Zone that they will benefit from the franchisee's execution of the Franchise Agreement. Stretch Zone requires the Guarantor to sign and deliver the Guaranty before entering into the Franchise Agreement with the franchisee.
This means that if Stretch Zone requires a personal guarantee from an individual, that person is bound by the terms of the guaranty. This is a common practice in franchising, especially when the franchisee is a business entity with limited assets. The guarantor is typically a principal owner or someone with a significant financial interest in the franchise.
The guarantor should carefully review the terms of the guaranty to understand the full extent of their obligations. They may be held personally liable for the franchisee's debts and other obligations under the Franchise Agreement. It is important to seek legal counsel to fully understand the implications of signing a guaranty.