What does the Landlord acknowledge regarding liens or security interests on the Stretch Zone Tenant/Franchisee's property?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
-
- Franchisor's Rights Upon Termination or Expiration of Franchise Agreement. The Landlord acknowledges that any landlord's lien or security interest does not include any property of the Tenant/Franchisee that includes any items bearing the Franchisor's trademarks including the signage and proprietary trade dress.
-
- Landlord's Statutory Lien or Security Interest. The Landlord subordinates its statutory lien or security interest in the Tenant's property to the security interest of the Franchisor. The Landlord will further cooperate in signing all required documents to recognize the subordination.
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 landlord acknowledges specific conditions regarding liens and security interests. The landlord's lien or security interest does not extend to the Stretch Zone franchisee's property that includes items bearing Stretch Zone's trademarks, such as signage and proprietary trade dress. This protects the Stretch Zone brand's identity and assets within the franchise location.
Additionally, the landlord subordinates any statutory lien or security interest they might have in the tenant's property to the security interest of Stretch Zone. This means that in the event of a financial issue, Stretch Zone's claim on the franchisee's assets takes precedence over the landlord's. The landlord is also obligated to cooperate by signing any necessary documents to formally recognize this subordination.
These provisions are designed to protect Stretch Zone's interests and ensure the consistent operation and branding of the franchise. By subordinating their own liens, landlords enable franchisees to secure financing or other arrangements that benefit the Stretch Zone system. This also prevents landlords from seizing Stretch Zone branded items in case of franchisee default, which could disrupt the brand's image and operations.