If legislation prevents me from operating my Stretch Zone franchise, is Stretch Zone liable for damages?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
- (d) Our Entry Right. If you fail or refuse to comply with the requirements of this Section, we have the right to enter upon the Premises to make all changes as may be required at your expense and at your sole risk. We have no responsibility for any actual or consequential damages to your property or others, and without liability for trespass or other tort or criminal act. You agree that your failure to make these alterations will cause us irreparable injury.
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)
The 2025 Stretch Zone Franchise Disclosure Document does not explicitly state whether Stretch Zone is liable for damages if legislation prevents a franchisee from operating their franchise. However, Section 12.5(d) addresses a related scenario: if a franchisee fails to comply with de-identification requirements after termination, Stretch Zone has the right to enter the premises to make changes at the franchisee's expense and risk, and Stretch Zone is not held responsible for any actual or consequential damages to the franchisee's property or others. This suggests that Stretch Zone aims to limit its liability regarding damages in certain operational scenarios.
While the FDD does not directly address liability for legislative issues, it does outline circumstances under which Stretch Zone is not responsible for damages related to the franchisee's actions or inactions. This may imply a broader stance on limiting liability unless explicitly stated otherwise in the agreement.
Prospective franchisees should seek clarification from Stretch Zone regarding liability in situations where new legislation impacts their ability to operate. It would be prudent to consult with a legal professional to understand potential risks and liabilities associated with regulatory changes and how they might affect the franchise agreement.