Which obligations of the Stretch Zone Franchisee survive the termination of the Franchise Agreement?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Post-Term Covenants. The termination and release provided in Sections 1 and 2 have no effect on Franchisee's obligations under the Franchise Agreement that expressly or by their nature survive the termination of the Franchise Agreement. These obligations specifically include obligations of confidentiality, the mutual indemnification provisions for matters arising before the date of this Agreement, and provisions concerning governing law and dispute resolution, that continue in full effect after the termination of the Franchise Agreement and until they are satisfied or by their nature expire.
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- Return of Confidential Information. Franchisee will immediately return to us all Confidential Information (as defined in the Franchise Agreement) in Franchisee's possession or control.
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- Nondisclosure. Franchisee and Guarantor will not discuss with, disclose to or communicate with anyone the terms of this Agreement or the facts surrounding, causing or resulting from the Stretch Zone Franchise, including any prospective, existing or former Stretch Zone Franchisee, unless required by legal process. Franchisee and Guarantors will only state that Franchisee has left the Stretch Zone System. Franchisee and Guarantor understand that the FTC Franchise Rule requires us to disclose Franchisee's name, home address and telephone number in our Franchise Disclosure Document for a specified period of time.
Source: Item 3 — Franchisee/Debtor's Warranties. (FDD pages 263–364)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, certain obligations of the franchisee survive the termination of the Franchise Agreement. These include obligations of confidentiality, which means the franchisee must continue to protect Stretch Zone's proprietary information even after the agreement ends.
Additionally, the mutual indemnification provisions for matters arising before the date of the agreement survive termination. This means that both Stretch Zone and the franchisee remain responsible for covering any losses or damages that the other party might incur due to events that occurred before the termination date. The provisions concerning governing law and dispute resolution also remain in effect, dictating how any legal disputes will be handled even after the franchise relationship has ended.
Specifically, the franchisee is obligated to immediately return all confidential information to Stretch Zone upon termination. Furthermore, the franchisee and guarantor are prohibited from discussing the terms of the agreement or the circumstances surrounding the Stretch Zone franchise with anyone, including other franchisees, unless legally required to do so. They are only permitted to state that the franchisee has left the Stretch Zone system. These post-termination covenants are designed to protect Stretch Zone's interests and maintain the integrity of the franchise system even after an individual franchise ceases operation.