Under what condition does the Stretch Zone Security Agreement automatically terminate, and what action is the Franchisor/Secured Party required to take?

According to the 2025 Stretch Zone Franchise Disclosure Document, the Security Agreement automatically terminates upon full performance under the Franchise Agreement without renewal. This means that once the franchisee has fulfilled all obligations outlined in the Franchise Agreement and the agreement is not renewed, the Security Agreement ends automatically.

Following the termination of the Security Agreement, Stretch Zone, acting as the Franchisor/Secured Party, is required to take a specific action. Stretch Zone must sign and send to the Franchisee/Debtor a UCC-3 Statement of Termination.

The UCC-3 Statement of Termination serves as an official record that the security interest is no longer in effect. This protects the franchisee by formally releasing them from any further obligations under the Security Agreement, and provides a clear record that the security interest has been terminated. Franchisees should ensure they receive this document to avoid potential future disputes or claims.