Under the Stretch Zone Area Development Agreement, what obligation does the franchisee undertake regarding the development and opening of Franchise Businesses in the Development Area?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) Grant. We grant to you the right and you undertake the obligation, to develop and operate a Franchise Business subject to the terms of this Agreement. You will operate the Franchise Business in accordance with the Business System. We grant you the right to use the Principal Trademark, Patents and other Intellectual Property. You will operate the Franchise Business only at the location described in Section 1.2. You agree not to advertise outside of your DMA.
- (b) Guaranty. If you are a Business Entity, each Franchise Owner holding a direct or indirect interest of 20% or more in you will execute an agreement, in the form that we designate, undertaking to be personally bound, jointly and severally with such other guaranteeing Franchise Owners, by all provisions of this Agreement and any and all related agreements (a "Guaranty"), the current version of which is attached as Exhibit G to the FDD. In addition, at our request, the spouse of each such guaranteeing Franchise Owner (as applicable) will execute the Guaranty.
Section 1.2 LOCATION OF YOUR FRANCHISE BUSINESS
- (a) Existing Premises. You agree that you will operate your Franchise Business only at the Premises described in Section 18.1.
- (b) Premises to be Determined. If the Premises do not exist at the time the parties sign this Agreement, the Premises will be at a location that you select and we approve within the Site Selection Area. We will describe the approved location in the Approved Location Addendum to this Agreement (attached as Exhibit D to the FDD) that the parties will sign at that time.
- (c) Change in Location. You cannot change the location of the Premises without our written consent and your compliance with our relocation procedures.
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, under the Area Development Agreement, the franchisee is granted the right and undertakes the obligation to develop and operate a Franchise Business, subject to the terms of the agreement. The franchisee must operate the Franchise Business in accordance with the Business System and is granted the right to use the Principal Trademark, Patents, and other Intellectual Property. The franchisee is obligated to operate the Franchise Business only at the location described in Section 1.2 of the agreement and agrees not to advertise outside of their DMA (Designated Market Area).
If the franchisee is a Business Entity, each Franchise Owner holding a direct or indirect interest of 20% or more must execute a Guaranty agreement, undertaking to be personally bound by all provisions of the agreement and any related agreements. At Stretch Zone's request, the spouse of each guaranteeing Franchise Owner may also be required to execute the Guaranty.
The location of the Franchise Business must either be at existing premises as described in Section 18.1, or at a location selected by the franchisee and approved by Stretch Zone within the Site Selection Area. The approved location will be detailed in the Approved Location Addendum to the agreement. The franchisee cannot change the location of the premises without Stretch Zone's written consent and compliance with their relocation procedures.