What state's laws does the Stretch Zone Franchise Agreement require to be applied?

According to the 2025 Stretch Zone Franchise Disclosure Document, the Franchise Agreement generally requires the application of Florida law. However, the FDD includes a California addendum noting that this provision may not be enforceable under California law for franchises operating in California. This means that while the agreement is drafted to be governed by Florida law, California franchise laws and related business codes may take precedence if there are inconsistencies or conflicts, especially concerning aspects like covenants not to compete, liquidated damages, and franchisee rights upon termination or transfer.

For prospective Stretch Zone franchisees in California, this is a critical consideration. The California addendum highlights several areas where California law specifically overrides or modifies the standard terms of the Franchise Agreement. These include the enforceability of non-compete clauses, the application of liquidated damages, and the franchisee's rights related to termination, transfer, and renewal. It also emphasizes that franchisees cannot waive their rights under California's Franchise Investment Law or Franchise Relations Act.

This situation creates a dual-layered legal framework. While the Franchise Agreement stipulates Florida law, California franchisees also operate under the protection of California-specific franchise regulations. Stretch Zone franchisees should consult with legal counsel in California to fully understand their rights and obligations, ensuring they are compliant with both the Franchise Agreement and California state laws. This is particularly important when dealing with issues such as dispute resolution, termination, and the sale or transfer of the franchise.

The FDD also notes that the arbitration for any disputes will occur in Broward County, Florida, with costs borne by the non-prevailing party; however, prospective franchisees are encouraged to seek legal counsel to determine the applicability of California and Federal laws to any provisions restricting venue to a forum outside of California. This suggests that while Stretch Zone's standard agreement specifies Florida as the legal jurisdiction, California franchisees have additional protections and considerations under their state's laws.