What representation and warranty does a Stretch Zone franchisee make regarding telephone services as of the effective date of the assignment?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
You represent, warrant and covenant to us that:
- (a) As of the effective date of the Assignment, all of your obligations and indebtedness for telephone services, telephone listing services and telephone directory advertisement services must be paid and current.
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, as a condition of the assignment agreement, the franchisee must represent, warrant, and covenant that all obligations and indebtedness for telephone services, telephone listing services, and telephone directory advertisement services are paid and current as of the effective date of the assignment. This means that a Stretch Zone franchisee must ensure that all bills related to telephone services, listings, and advertisements are up-to-date when the assignment agreement takes effect.
This requirement protects Stretch Zone by ensuring that the company does not inherit any outstanding debts or liabilities related to telephone services when the assignment occurs. It also provides a clear understanding of the financial status of these services at the time of the transfer. The assignment agreement is put into effect immediately upon the expiration or termination of the Franchise Agreement, which automatically assigns all rights, titles, and interests in telephone numbers, facsimile numbers, telephone listings, and telephone directory advertisements to Stretch Zone.
In practical terms, a prospective Stretch Zone franchisee should maintain meticulous records of all payments related to telephone services, listings, and advertisements. Before the potential expiration or termination of the franchise agreement, the franchisee should conduct a thorough audit to confirm that all outstanding balances are settled. This proactive approach will help ensure compliance with the terms of the assignment agreement and avoid any potential disputes with Stretch Zone.
Failure to meet this condition could result in legal or financial repercussions for the franchisee. It is essential for franchisees to understand and adhere to this requirement to maintain a smooth and transparent business relationship with Stretch Zone. This also ensures a seamless transition of telephone-related assets back to the company upon the conclusion of the franchise agreement.