What laws govern disputes between Stretch Zone and its franchisees?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
THE PARTIES WAIVE ALL RIGHT TO ANY PUNITIVE OR EXEMPLARY DAMAGES AGAINST THE OTHER AND AGREE THAT UPON A DISPUTE BETWEEN THEM, EACH IS LIMITED TO THE RECOVERY OF ACTUAL DAMAGES HE, SHE OR IT SUSTAINS.
Section 17.9 WAIVER OF JURY TRIAL
THE PARTIES WAIVE THE RIGHT TO A TRIAL BY JURY OF ALL CLAIMS MADE BETWEEN THEM WHETHER EXISTING NOW OR IN THE FUTURE, INCLUDING ALL CLAIMS, DEFENSES, COUNTERCLAIMS, CROSS CLAIMS, THIRD PARTY CLAIMS AND INTERVENOR'S CLAIMS INVOLVING THE SALE, NEGOTIATION, SIGNING OR PERFORMANCE OF THE TRANSACTIONS INVOLVING THIS AGREEMENT.
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, disputes between Stretch Zone and its franchisees are governed by specific clauses within the franchise agreement. The agreement stipulates that both parties waive their rights to punitive or exemplary damages, limiting recovery to actual damages sustained in the event of a dispute. This means that neither Stretch Zone nor the franchisee can seek additional damages beyond the direct financial losses incurred.
Furthermore, the Stretch Zone franchise agreement includes a waiver of jury trial. This means that both Stretch Zone and the franchisee agree to resolve any claims through a different legal process, such as arbitration or a bench trial (where a judge makes the decision), rather than a jury trial. This waiver applies to all claims, defenses, counterclaims, and other legal actions related to the franchise agreement, including its sale, negotiation, signing, or performance.
These provisions are common in franchise agreements as they aim to streamline dispute resolution and reduce potential costs. By waiving punitive damages and jury trials, Stretch Zone seeks to create a more predictable and efficient legal process. Prospective franchisees should carefully consider these clauses and understand the implications of waiving these rights before entering into the franchise agreement. It is advisable to consult with a legal professional to fully understand the legal ramifications.