During inspections, is a Stretch Zone franchisee required to permit field representatives to observe how they are selling products and rendering services?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
(a) Periodic Inspections. You will permit our field representatives to enter your Franchise Business at all reasonable times during the business day to assist you, to evaluate your business operations and to ascertain that you are complying with the provisions of this Agreement. We have the right to inspect and evaluate your building, land and equipment, and to test, sample, inspect and evaluate your supplies, ingredients and products, as well as the storage, preparation and formulation and the conditions of sanitation and cleanliness in the storage, production, handling and serving. We will perform an inspection in a manner that minimizes interference with the
operation of your Franchise Business. You will cooperate fully with our field representatives in the inspection. You will render assistance as they may reasonably request. You will permit them to observe how you are selling the products and rendering the services, to monitor sales volume, to conduct a physical inventory, to confer with your employees and customers and to remove samples of any products, supplies and materials in amounts reasonably necessary for inspection at our office and record keeping. We may videotape the inspection.
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, franchisees are required to allow field representatives to enter their business during reasonable business hours for inspections and evaluations. These inspections are intended to assist the franchisee, evaluate business operations, and ensure compliance with the franchise agreement.
During these inspections, Stretch Zone's representatives have the right to inspect the building, land, and equipment, as well as test and evaluate supplies, ingredients, and products. They can also assess the storage, preparation, and formulation processes, along with the sanitation and cleanliness of the facility. The inspections are to be conducted in a way that minimizes disruption to the business.
Specifically, franchisees must allow the representatives to observe how products are being sold and services are being rendered. They are also permitted to monitor sales volume, conduct physical inventories, confer with employees and customers, and remove samples of products and supplies for inspection and record keeping. Stretch Zone also reserves the right to videotape the inspection. After the inspection, Stretch Zone will provide an evaluation report detailing any deficiencies and required corrective actions, which the franchisee must address immediately. Failure to correct deficiencies can result in an event of default under the franchise agreement.