What release agreement must the Stretch Zone franchisee sign upon transfer?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) If the Tenant/Franchisee defaults under the Lease, the Franchisor may (but is under no obligation to), within 30 days after receipt of written notice from the Landlord, cure the default (or a longer period of time if the default is not capable of being cured within 30 days and the Franchisor is diligently proceeding to cure the default).
If the Franchisor cures the Tenant/Franchisee's default, the Franchisor has the right to occupy the Premises and operate the Franchise Business.
The Tenant/Franchisee is deemed to have assigned the Lease to the Franchisor, but the Tenant/Franchisee and any guarantors are not released from their obligations under the Lease.
From and after the deemed assignment, the Franchisor will assume and perform all of the obligations of the Tenant/Franchisee under the Lease until the Franchisor is released in accordance with Subsection 4(b).
- (b) The Franchisor may assign the Lease to another Stretch Zone Franchisee with the Landlord's written approval of the new tenant/franchisee.
The Landlord will not unreasonably withhold, delay or condition its approval of the new tenant/franchisee.
Upon the permitted assignment by the Franchisor to the new tenant/franchisee, the Franchisor is released from all further obligations under the Lease.
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)
Based on the 2025 Stretch Zone Franchise Disclosure Document, if a franchisee defaults on their lease and Stretch Zone Franchising, LLC cures the default, the franchisee is deemed to have assigned the lease to Stretch Zone. However, the original franchisee and any guarantors are not released from their obligations under the lease.
Stretch Zone Franchising, LLC, as the franchisor, has the option to assign the lease to another Stretch Zone franchisee, but this requires written approval from the landlord. The landlord's approval of the new tenant/franchisee cannot be unreasonably withheld, delayed, or conditioned.
Upon the franchisor's permitted assignment of the lease to a new tenant/franchisee, Stretch Zone Franchising, LLC is then released from any further obligations under the lease. This process ensures that while Stretch Zone can step in to maintain operations and assign the lease, the original franchisee remains responsible unless a new franchisee is approved and the lease is properly assigned.