What is Stretch Zone's requirement regarding the effectiveness of a franchisee's lease agreement?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
| THIS AGREEMENT is signed on among Stretch Zone Franchising LLC (the "Franchisor");, a limited liability company (the "Landlord") and , LLC, a limited liability company (the |
|---|
| "Tenant/Franchisee"). |
| BACKGROUND |
| A. |
| The Tenant/Franchisee is a franchisee of the Franchisor under a Stretch Zone |
| Franchise Agreement between the Franchisor and the Tenant/Franchisee dated |
| (the "Franchise Agreement") for the operation of a Stretch Zone (the "Franchise Business"). |
| B. |
| The Landlord and the Tenant/Franchisee are parties to a Lease Agreement dated |
| (the |
| "Lease") |
| for |
| the |
| premises |
| located |
| at |
| (the |
| "Premises") |
| that |
| has |
| been |
| approved by the Franchisor on condition that all the parties sign this Agreement. |
| C. |
| In order to assure that a Franchise Business continues to operate at the Premises, |
| the Landlord grants certain rights to the Franchisor under the Lease to protect the Franchisor's |
| interest under the Franchise Agreement. |
| The parties agree as follows: |
| TERMS |
4. Right to Cure and Take Occupancy.
- (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.
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- Franchisor's Rights Upon Termination or Expiration of Franchise Agreement. The Landlord acknowledges that any landlord's lien or security interest does not include any property of the Tenant/Franchisee that includes any items bearing the Franchisor's trademarks including the signage and proprietary trade dress.
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 franchisor's approval of the franchisee's lease agreement is contingent upon all parties signing an agreement that ensures the Franchise Business continues to operate at the premises. This agreement grants Stretch Zone certain rights under the lease to protect its interests under the Franchise Agreement.
Specifically, if a Stretch Zone franchisee defaults on their lease, Stretch Zone has the option, but not the obligation, to cure the default within 30 days of receiving written notice from the landlord. If Stretch Zone cures the default, it has the right to occupy the premises and operate the Franchise Business. In such a scenario, the franchisee is considered to have assigned the lease to Stretch Zone, although the franchisee and any guarantors remain responsible for their obligations under the lease.
Stretch Zone also has the right to assign the lease to another Stretch Zone franchisee, subject to the landlord's written approval, which cannot be unreasonably withheld, delayed, or conditioned. Upon such an assignment, Stretch Zone is released from further obligations under the lease. Additionally, the landlord acknowledges that any landlord's lien or security interest does not extend to items bearing Stretch Zone's trademarks, including signage and proprietary trade dress.