How will Stretch Zone make payment for the Interest or Assets at closing?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
We will simultaneously make payment of any cash consideration for the Interest or Assets by a cashier's check drawn on a financial institution or payment by the issuance of the shares less any amounts you then owe us, if any.
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 Stretch Zone's 2025 Franchise Disclosure Document, Stretch Zone will make payment for any cash consideration regarding the Interest or Assets via a cashier's check from a financial institution. Alternatively, payment may be made through the issuance of shares, after deducting any amounts the franchisee owes to Stretch Zone.
This means that when Stretch Zone exercises its right of first refusal to purchase a franchisee's interest or assets, the payment will be made either through a cashier's check, ensuring immediate and secure funds transfer, or by issuing shares in Stretch Zone, which could be beneficial for both parties depending on the valuation and future prospects of the company. The deduction of any outstanding debts owed by the franchisee to Stretch Zone ensures that all financial obligations are settled during the transaction.
For a prospective franchisee, this information is crucial for understanding the financial aspects of potential transactions with Stretch Zone. Knowing the payment methods allows for better financial planning and ensures transparency in how such transactions will be handled. It also highlights the importance of maintaining good financial standing with Stretch Zone to avoid deductions during any future sale of interest or assets.