What state's laws govern the Stretch Zone franchise agreement, and where will venue be?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
RHODE ISLAND ADDENDUM TO FRANCHISE AGREEMENT
This Addendum to the Franchise Agreement is agreed to on between Stretch Zone Franchising, LLC, a Florida limited liability company ("we" "us" or "our") and ("you" or "your").
- The Rhode Island Securities Division requires that certain provisions contained in the Franchise Agreement be amended to be consistent with Rhode Island law, including the Franchise Investment Act, R. I. Gen. Law Ch. 395 Sec. 19-28.1-1 to 19-28.1-34 (the "Act"). To the extent that the Franchise Agreement contains provisions that are inconsistent with the Act, the provisions are amended:
(a) Venue
If the Franchise Agreement requires litigation or arbitration to be conducted in a forum other than the State of Rhode Island, the requirement is void under the Act.
(b) Governing Law
If the Franchise Agreement requires that it be governed by a state's law, other than the State of Rhode Island, to the extent that this law conflicts with the Act, the Act will control.
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 franchise agreement's governing law and venue depend on the franchisee's location. Specifically, for franchisees in Rhode Island, an addendum modifies the standard agreement. If the standard Stretch Zone Franchise Agreement requires that it be governed by a state's law other than Rhode Island, the Rhode Island Franchise Investment Act will control to the extent that the other state's law conflicts with the Act.
Furthermore, if the standard agreement requires litigation or arbitration to be conducted in a forum outside of Rhode Island, that requirement is void under the Act. This means that Rhode Island franchisees are entitled to have legal disputes resolved within their own state, under the protection of Rhode Island law, regardless of what the standard Stretch Zone agreement stipulates.
This addendum ensures that Rhode Island franchisees are not subjected to potentially unfavorable laws or distant legal venues. Prospective Stretch Zone franchisees in Rhode Island should carefully review the Rhode Island addendum to fully understand their rights and how they differ from the standard franchise agreement.