Does Stretch Zone require a Guaranty agreement as part of its franchising contracts?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
The following contracts, agreements and other relevant documents are attached as Exhibits to this Franchise Disclosure Document:
- C Franchise Agreement
- D Approved Location Addendum to Franchise Agreement
- E Area Development Agreement
- F State Addenda to Agreements (if applicable)
- G Guaranty
- H Agreement with Landlord
- I Telephone Number and Directory Advertising Assignment Agreement
Source: Item 22 — ITEM -22 CONTRACTS (FDD pages 84–89)
What This Means (2025 FDD)
According to the 2025 Stretch Zone Franchise Disclosure Document, a Guaranty agreement is included as an exhibit to the franchise agreement. Specifically, Exhibit G lists 'Guaranty' as one of the contracts, agreements, and other relevant documents attached to the FDD.
This implies that Stretch Zone may require a franchisee to have a third party, such as a parent company or individual with substantial assets, guarantee the franchisee's obligations under the Franchise Agreement. This is a fairly common practice in franchising, particularly when the franchisee is a newly formed entity or lacks a significant operating history. The guarantor essentially promises to step in and fulfill the franchisee's financial or contractual duties if the franchisee defaults.
Prospective Stretch Zone franchisees should carefully review the Guaranty agreement (Exhibit G) to understand the scope of the guarantor's obligations, the conditions under which the guaranty would be triggered, and any limitations on the guarantor's liability. It is important to note that the specific terms of the Guaranty agreement can vary, so franchisees should seek legal counsel to fully understand their obligations and potential risks.