How much notice does Stretch Zone need to give the franchisee before selling the collateral?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
bly convenient to Franchisee/Debtor to assemble the Collateral.
- (d) The Franchisee/Debtor agrees that a notice to the Franchisee/Debtor, at least 5 days before the time of any intended sale or of the time after which any public or private sale or other disposition of the Collateral may be made, is reasonable notice of the sale or other disposition.
- (e) Without precluding any other methods of sale, the sale of the Collateral has been made in a commercially reasonable manner if conducted in conformity with reasonable commercial practices, however, the Franchisor/Secured Party may sell on terms as it may choose, without assuming any credit risk and without any obligation to advertise or give notice of any kind.
- (f) The Collateral need not be present at any public or private sale or in view of the purchaser or purchasers. Title passes upon sale wherever the property is located with like effect as though all the property were present and in the possession of the person conducting the sale and where physically delivered to the purchaser.
Source: Item 3 — Franchisee/Debtor's Warranties. (FDD pages 263–364)
What This Means (2025 FDD)
According to the 2025 Stretch Zone Franchise Disclosure Document, Stretch Zone must provide the franchisee with at least 5 days' notice before selling any collateral. This notice applies to any intended sale, whether public or private, or any other disposition of the collateral. This allows the franchisee some time to prepare or take action before the sale occurs.
However, the FDD also states that Stretch Zone can sell the collateral in a commercially reasonable manner, and may sell on terms it chooses without assuming credit risk or being obligated to advertise or give notice of any kind. This seems to contradict the 5-day notice provision. It also states that the collateral does not need to be present at any sale.
These conditions significantly favor Stretch Zone in the event of a default. The franchisee should be aware that while a 5-day notice is mentioned, Stretch Zone retains considerable latitude in how it disposes of the collateral. A prospective franchisee should seek clarification on how these provisions are applied in practice and under what circumstances the notice period might be waived.
Furthermore, the agreement specifies that any location within Broward County, Florida, is considered a reasonably convenient place for the franchisee to assemble the collateral. This could pose a logistical challenge for franchisees located outside of Broward County, Florida, as they may be required to transport the collateral to that location.