What representation does the Guarantor make about previously delivered financial statements to Stretch Zone?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
- (e) Any financial statements previously delivered by the Guarantor to the Franchisor were true and correct in all respects as of the date delivered.
At any time this Guaranty is in effect, Guarantor will, upon 7-days prior written notice from the Franchisor, provide the Franchisor with a current financial statement and such other financial information as the Franchisor may reasonably request (including copies of Guarantor's filed federal and state income tax returns for the most recent taxable year).
The Franchisor agrees to keep confidential and not use such financial statements and information, except in connection with the administration or enforcement of the Franchise Agreement or this Guaranty.
The financial statements must be prepared in accordance with generally accepted accounting principles.
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 Stretch Zone's 2025 Franchise Disclosure Document, the Guarantor represents and warrants that any financial statements they previously provided to Stretch Zone were accurate and correct in all respects as of the date they were delivered. This representation is part of the broader set of representations and warranties the Guarantor makes to Stretch Zone.
This means that Stretch Zone relies on the accuracy of the financial information provided by the Guarantor when assessing the financial stability and overall risk associated with the franchise agreement. If the financial statements were not accurate, it could potentially impact Stretch Zone's decision to grant the franchise or the terms under which the franchise is granted.
Furthermore, the Guarantor is obligated to provide updated financial statements to Stretch Zone upon 7 days' notice. These statements must adhere to generally accepted accounting principles. Stretch Zone agrees to keep these financial statements confidential and only use them in connection with the administration or enforcement of the Franchise Agreement or the Guaranty.