What representation does the Guarantor make regarding their capacity to enter into the Stretch Zone Guaranty?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Representations and Warranties. The Guarantor represents as follows:
(a) The Guarantor has the capacity to enter into, perform and deliver this Guaranty.
(b) This Guaranty is the legal, valid, binding and enforceable obligations of the Guarantor.
(c) There is no litigation or governmental proceeding pending or threatened against the Guarantor, nor has there occurred any event, nor does there exist any condition, on the basis of which any litigation or proceeding might be begun, which litigation or proceeding, if adversely determined, could have a material adverse effect on the respective properties, operations, assets, condition (financial, business, labor or otherwise) or prospects of the Guarantor.
(d) The Guarantor has independent means of obtaining reports and financial information about the Developer and the Franchisor has no obligation, either before the signing of this Guaranty or any time thereafter, to notify the Guarantor concerning the Developer's financial condition or of any event or occurrence affecting the Developer's financial condition or business operation.
(e) Any financial statements previously delivered by the Guarantor to the Franchisor were true and correct in all respects as of the date delivered.
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 Franchise Disclosure Document, the Guarantor makes several representations and warranties. Specifically, the Guarantor represents that they have the legal and mental capacity to enter into, perform, and deliver the Guaranty. This means the Guarantor is of sound mind, of legal age, and not under any legal disability that would prevent them from entering into a binding agreement.
Additionally, the Guarantor warrants that the Guaranty is a legal, valid, binding, and enforceable obligation. This confirms that the Guaranty is legally sound and can be enforced against the Guarantor if the Franchisee defaults on their obligations. The Guarantor also confirms that there are no current or threatened legal proceedings that could adversely affect their ability to fulfill their obligations under the Guaranty.
Furthermore, the Guarantor acknowledges that they have independent means of obtaining financial information about the Franchisee and that Stretch Zone has no obligation to notify them of the Franchisee's financial condition. The Guarantor also confirms that any previously delivered financial statements were accurate. These representations are crucial for Stretch Zone, as they provide assurance that the Guarantor is capable of meeting the financial obligations outlined in the Guaranty and has the resources to stay informed about the Franchisee's financial standing.