What happens to a Stretch Zone franchisee's Development Schedule if a Franchise Agreement is terminated?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 6.3 EFFECT OF TERMINATION OR EXPIRATION
Upon termination or expiration of this Agreement, all your Area Development Rights cease rights cease, and you will have no further right to develop any additional Franchise Businesses under this Agreement.
ARTICLE 7 - DEFINITIONS
Section 7.1 DEFINITIONS
As used in this Agreement, the following terms have the following meanings:
"Agreement" means this Stretch Zone Development Agreement, as it may be amended, supplemented or otherwise modified by a written agreement the parties sign.
"Agreement Date" means the date set forth on page 1 of this Agreement.
"Area Development Rights" mean the rights granted to you under ARTICLE 1 to develop and open number (#) Franchise Businesses in the Development Area under the terms of this Agreement.
"Company-Owned Business" means a Stretch Zone business operating pursuant to the Business System that is owned by us or by any affiliate.
"Designee" means one or more of our representatives who are independent contractors that we appoint to perform certain of our duties under this Agreement as described in ARTICLE 2.
"Development Area" means territory.
"Development Fee" means the fee described in Section 3.1.
"Development Schedule" means the number of Franchise Businesses to be developed and the period in which to open the number (#) Franchise Businesses, as stated in Section 1.3.
"Franchise Agreement" means the then-standard form of Stretch Zone Franchise Agreement we are offering to new franchisees, the current form of which is included in Exhibit C to the Franchise Disclosure Document.
"Franchise Business" means a Stretch Zone Franchise that we authorize you to develop and open under this Agreement.
"Franchise Disclosure Document" or "FDD" means our current Franchise Disclosure Document and all Exhibits.
"Term" means the term of the Agreement described in Section 3.2.
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 FDD, if the Area Development Agreement is terminated or expires, the developer's Area Development Rights cease, and they no longer have the right to develop additional franchise businesses under the agreement. The Development Schedule outlines the number of franchise businesses to be developed and the period for opening them, as detailed in Section 1.3 of the agreement.
This means that upon termination, a Stretch Zone franchisee loses the right to open any further locations within their designated Development Area, as previously agreed upon in the Development Schedule. This can have significant implications for a franchisee who has planned for future expansion and invested resources based on the initial agreement.
Prospective Stretch Zone franchisees should carefully consider the terms of the Area Development Agreement, particularly the conditions under which it can be terminated and the consequences of such termination on their development rights and schedule. Understanding these terms is crucial for making informed decisions about the investment and planning for the future of their franchise business.