How much is the transfer fee for a Stretch Zone franchise?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
You will not be required to pay us a Transfer Fee in connection with a transfer in accordance with this Section 10.2(b). You understand that, if you transfer this Agreement to a Business Entity, you remain personally liable for all the monetary and non-monetary obligations under this Agreement arising before or after the transfer through the end of the Initial Term and any Renewal Term.
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, a franchisee may be able to assign their agreement to a business entity without incurring a transfer fee under specific conditions.
Specifically, if the franchisee owns a majority of the equity interests in the business entity, they may assign the agreement without a transfer fee. However, several conditions must be met. First, the franchisee or a Regional Manager must actively manage the business entity and dedicate their full time and effort to the franchise's daily operations. Stretch Zone must be informed of the Regional Manager's name, and the manager must meet Stretch Zone's standards, including training requirements. Second, the business entity's name cannot include "Stretch Zone". Third, the business entity's Board of Directors (or Management Committee) and Shareholders (or Members) must approve the agreement's assumption, authorize an officer or manager to sign a joinder agreement, and appoint a Designated Representative. Finally, an authorized officer or manager of the business entity must sign a document, approved by Stretch Zone, agreeing to be bound by all provisions of the Franchise Agreement.
Even with the transfer to a business entity, the original franchisee remains personally liable for all monetary and non-monetary obligations under the agreement, both before and after the transfer, throughout the initial and any renewal terms. This means that while the franchisee can transfer the operational responsibilities to a business entity, they cannot escape the financial and legal responsibilities outlined in the Franchise Agreement.