If Stretch Zone modifies or discontinues the use of its Principal Trademark or other Intellectual Property, who is responsible for the expenses of substituting the modified or new Intellectual Property in my Stretch Zone Franchise Business?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
If we deem it advisable to modify or discontinue the use the Principal Trademark or any of the other Intellectual Property and/or use an additional or substitute Principal Trademark including: (i) due to the rejection of any pending application for registration: (ii) revocation of any existing registration of any of the Intellectual Property (ii) the rights of senior users; (iv) our negligence; (v) a radical change in direction of the Business System we unilaterally cause or mandate; or (vi) the modification or discontinuation of the use of any of the Intellectual Property is due to a continuing need to modernize the Business System, you are liable for all expenses in substituting the modified
or new Intellectual Property in your Franchise Business. You are obligated to do so within 30 days of our request.
Source: Item 13 — ITEM -13 TRADEMARKS (FDD pages 58–60)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, if Stretch Zone deems it necessary to modify or discontinue the use of its Principal Trademark or other Intellectual Property, the franchisee is responsible for all expenses associated with substituting the modified or new Intellectual Property in their Stretch Zone franchise business. This includes situations arising from rejection of trademark applications, revocation of existing registrations, rights of senior users, Stretch Zone's negligence, a radical change in the Business System caused by Stretch Zone, or a continuing need to modernize the Business System.
This means that as a Stretch Zone franchisee, you would bear the financial burden of updating signage, marketing materials, and other branded items to reflect any changes to the trademarks or intellectual property. This obligation exists regardless of the reason for the modification or discontinuation, even if it's due to circumstances within Stretch Zone's control. Franchisees are obligated to implement these changes within 30 days of Stretch Zone's request.
This is a significant financial risk for prospective franchisees. Typically, franchisors bear at least some of the costs associated with rebranding or trademark modifications, especially if the changes are due to the franchisor's actions or errors. The fact that Stretch Zone places the entire financial burden on the franchisee is an important point to consider. A prospective franchisee should carefully evaluate the potential costs of such changes and factor them into their financial projections. It would be prudent to discuss this issue with existing franchisees to understand the potential scope and frequency of these types of changes and their associated costs.
It is important to note that while the franchisee is responsible for the costs of substituting modified intellectual property, Stretch Zone does offer indemnification against damages and costs resulting from claims of infringement related to the franchisee's use of the intellectual property, provided the franchisee adheres to the conditions outlined in the Franchise Agreement, such as timely notification of claims and allowing Stretch Zone control over the defense.