Is the performance of all obligations secured by the security interest for a Stretch Zone franchise?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
2. Obligations Secured.
The security interest secures the payment and performance of all indebtedness, obligations and liabilities of any kind of the Franchisee/Debtor to the Franchisor/Secured Party now or later existing, arising directly between the Franchisee/Debtor and the Franchisor/Secured Party including the Franchisee's/Debtors obligations under the Area Development Agreement and Franchise Agreement (collectively, the "Obligations").
Source: Item 2 — Obligations Secured. (FDD page 263)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, the security interest secures the payment and performance of all indebtedness, obligations, and liabilities of any kind from the franchisee to Stretch Zone. This includes any obligations arising directly between the franchisee and Stretch Zone, both now and in the future.
Specifically, the obligations secured by the security interest include the franchisee's obligations under both the Area Development Agreement and the Franchise Agreement. These agreements collectively define the scope of the franchisee's responsibilities and financial commitments to Stretch Zone.
This means that Stretch Zone has a legal claim on the franchisee's assets to ensure that all financial and performance-related obligations are met. Prospective franchisees should carefully review the Area Development Agreement and Franchise Agreement to fully understand the extent of these obligations and the implications of the security interest.