What specific obligations of a Stretch Zone Franchisee are included in the post-term covenants?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Post-Term Covenants. The termination and release provided in Sections 1 and 2 have no effect on Franchisee's obligations under the Franchise Agreement that expressly or by their nature survive the termination of the Franchise Agreement. These obligations specifically include obligations of confidentiality, the mutual indemnification provisions for matters arising before the date of this Agreement, and provisions concerning governing law and dispute resolution, that continue in full effect after the termination of the Franchise Agreement and until they are satisfied or by their nature expire.
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- Return of Confidential Information. Franchisee will immediately return to us all Confidential Information (as defined in the Franchise Agreement) in Franchisee's possession or control.
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- Nondisclosure. Franchisee and Guarantor will not discuss with, disclose to or communicate with anyone the terms of this Agreement or the facts surrounding, causing or resulting from the Stretch Zone Franchise, including any prospective, existing or former Stretch Zone Franchisee, unless required by legal process. Franchisee and Guarantors will only state that Franchisee has left the Stretch Zone System. Franchisee and Guarantor understand that the FTC Franchise Rule requires us to disclose Franchisee's name, home address and telephone number in our Franchise Disclosure Document for a specified period of time.
Source: Item 3 — Franchisee/Debtor's Warranties. (FDD pages 263–364)
What This Means (2025 FDD)
According to the 2025 Stretch Zone Franchise Disclosure Document, the post-term covenants include several obligations for the franchisee after the termination of the Franchise Agreement. These obligations encompass maintaining confidentiality, adhering to mutual indemnification provisions for issues predating the termination agreement, and abiding by the stipulations regarding governing law and dispute resolution. These responsibilities remain in effect even after the Franchise Agreement concludes, persisting until they are either fulfilled or naturally expire.
Specifically, the franchisee is obligated to promptly return all confidential information to Stretch Zone. This includes any data, documents, or knowledge gained during the franchise term that Stretch Zone considers proprietary. Furthermore, the franchisee and any guarantor are prohibited from discussing or disclosing the terms of the termination agreement or any facts related to the Stretch Zone franchise with anyone, including potential, current, or former Stretch Zone franchisees, unless legally required. In such cases, they are limited to stating that the franchisee has left the Stretch Zone system.
These post-term covenants are designed to protect Stretch Zone's interests and maintain the integrity of its franchise system even after a franchisee exits the network. Franchisees should be aware of these ongoing obligations and understand that they extend beyond the active term of their franchise agreement. The FTC Franchise Rule mandates that Stretch Zone disclose the franchisee's name, home address, and telephone number in their Franchise Disclosure Document for a certain period, which franchisees should also be aware of.