Under what conditions can Stretch Zone revoke approval of a supplier?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
We reserve the right to reinspect the facilities and products of any approved supplier and continue to sample the products at the supplier's expense. We reserve the right to revoke approval upon the supplier's failure to continue to meet our standards.
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 FDD, Stretch Zone retains the right to revoke approval of a supplier if that supplier fails to continue meeting Stretch Zone's standards. This means that even after a supplier has been initially approved, Stretch Zone can withdraw that approval if the supplier's products, services, or practices no longer align with the brand's requirements.
For a prospective Stretch Zone franchisee, this clause underscores the importance of adhering to approved suppliers. While franchisees may propose new suppliers, Stretch Zone maintains control over the supply chain to ensure quality and consistency across all franchise locations. The initial approval process involves potential inspections, testing (at the franchisee's expense up to $1,500), and evidence of adequate insurance.
The ongoing right to revoke approval gives Stretch Zone a mechanism to maintain standards and protect its brand. However, it also means that a franchisee's supply chain could be disrupted if a previously approved supplier loses that approval. Franchisees should stay informed about any changes to the approved supplier list and be prepared to adapt to new suppliers if necessary. This also highlights the importance of the franchisee maintaining a good relationship with Stretch Zone to ensure open communication regarding supplier issues.
This type of clause is fairly standard in franchising, as franchisors need to maintain quality control and consistency across their brand. Franchisees benefit from the franchisor's vetting process, but they also bear the risk of supplier changes. Therefore, understanding the approved supplier list and the conditions under which approvals can be revoked is a crucial part of due diligence for any prospective Stretch Zone franchisee.