Can Stretch Zone terminate the Area Development Agreement without cause?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Area Development Agreement | Summary |
|---|---|---|
| e. Termination by us | Not Applicable | Not Applicable |
| without cause | ||
| f. Termination by us | Section 7.2 | We may only terminate your Area Development |
| with cause | Agreement with cause. | |
| g. “Cause” defined – curable defaults | Section 7.3 | You have 30 days or any longer period as applicable law may require, after written notice of default to cure any default and provide evidence of cure satisfactory to us. If you fail to cure timely any curable default, we have the right to terminate the Area Development Agreement effective upon your receipt of our written notice of termination. You have the burden of proving you have timely cured any default, to the extent it is a curable default under the Area Development Agreement. Upon |
Source: Item 17 — ITEM -17 RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 65–73)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, Stretch Zone cannot terminate the Area Development Agreement without cause. The FDD specifies that Stretch Zone may only terminate the Area Development Agreement with cause, as detailed in Section 7.2 of the agreement.
This provision protects the Area Developer from arbitrary termination, ensuring that Stretch Zone must have a legitimate reason based on the agreement's terms to end the relationship. This offers a degree of security for the Area Developer's investment and efforts in developing the territory.
However, it is important for prospective Area Developers to understand what constitutes "cause" for termination under the Area Development Agreement. Section 7.3 indicates that the Area Developer typically has 30 days after written notice to cure any default. Failure to cure the default within the given timeframe allows Stretch Zone to terminate the agreement. The Area Developer bears the responsibility of proving that they have adequately addressed the default within the allotted time.