When does the title of the collateral pass to the purchaser during a sale by Stretch Zone?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
Title passes upon sale wherever the property is located with like effect as though all the property were present and in the possession of the person conducting the sale and where physically delivered to the purchaser.
The Franchisor/Secured Party may bid for and purchase all the Collateral or any part of the Collateral, and by purchase, becomes the owner of the Collateral.
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 title of collateral passes to the purchaser upon the sale of the property, regardless of its location. This transfer of ownership is as effective as if the property were physically present and delivered to the purchaser by the person conducting the sale.
This means that once a sale is executed, the purchaser immediately gains legal ownership of the collateral, even if the physical transfer occurs later or the collateral is in a different location. This clause protects the purchaser's rights and clarifies the point at which ownership officially changes hands.
Stretch Zone also retains the right to bid for and purchase the collateral themselves, becoming the owner upon purchase. This provides Stretch Zone with an option to regain control of the assets if a franchisee defaults or the collateral is sold. This clause ensures that Stretch Zone can recover assets and maintain control over its brand and operations in such situations.