Which state's law governs the Area Development Agreement for Stretch Zone?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
ois Franchise Disclosure Act, any condition, stipulation or provision purporting to bind any person acquiring any Franchise to waive compliance with the Illinois Franchise Disclosure Act or any other law of Illinois is void.
-
- All initial fees are deferred until we have performed all of pre-opening obligations and you are open for business. The Illinois Attorney General's Office imposed this deferral requirement due to our financial condition.
Section 3.1(a) of the Franchise Agreement is amended as follows:
- (a) Initial Franchise Fee. You must pay to us an Initial Franchise Fee of $59,500. The Initial Franchise Fee will be deferred and is not payable to us until we have complied with all of our pre-opening obligations to you under the Franchise Agreement and you are open for business. The Initial Franchise Fee is uniform as to all Franchisees currently purchasing a Franchise.
-
- This Amendment is effective only to the extent that the jurisdictional requirements of the Act are met independent of this Amendment. This Amendment has no force and effect if the jurisdictional requirements are not met.
In witness whereof, each of the undersigned acknowledges having read this Addendum, understands and consents to be bound by all of its terms.
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 FDD, the Area Development Agreement is governed by Illinois law, specifically when the agreement pertains to that state. The Illinois Addendum to the Area Development Agreement explicitly states this condition.
This means that if a dispute arises concerning an Area Development Agreement in Illinois, Illinois state law will be used to interpret the agreement and resolve the dispute. This is significant for prospective Stretch Zone area developers in Illinois, as it ensures that their agreement is subject to the protections and regulations provided by Illinois law.
Additionally, the addendum specifies that any provision in the Area Development Agreement that designates jurisdiction or venue in a forum outside of Illinois is void, although arbitration may still take place outside of the state. This further reinforces the application of Illinois law and provides clarity on where legal proceedings related to the agreement can occur.