After the Spray Net agreement expires or is terminated, is a franchisee allowed to solicit employees of any other Spray Net franchisee to discontinue employment?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
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- For a period of two (2) years after the expiration and nonrenewal, transfer or termination of this Agreement, regardless of the cause, neither Franchisee, its principals, owners and guarantors, nor any member of the immediate family of Franchisee, its principals, owners or guarantors, may, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, partnership or corporation, be involved with any business that competes in whole or in part with Franchisor by offering or granting licenses or franchises, or establishing joint ventures, for the ownership or operation of a Competing Business. The geographic scope of the covenant contained in this Section is any location where Franchisor can demonstrate it has offered or sold franchises as of the date this Agreement is terminated or expires.
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- For a period of two (2) years after the expiration and nonrenewal, transfer or termination of this Agreement, regardless of the cause, neither Franchisee, its principals, owners and guarantors, nor any member of the immediate family of Franchisee, its principals, owners or guarantors, may, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, partnership or corporation:
- a. Own, maintain, engage in, be employed as an officer, director, or principal of, lend money to, extend credit to, lease/sublease space to, or have any interest in or involvement with any other Competing Business:
- i. within the Designated Territory;
- ii. within a fifty (50) mile radius of the Designated Territory;
- iii. within a fifty (50) mile radius of any Spray-Net franchised business
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
The 2025 Spray Net Franchise Disclosure Document (FDD) addresses certain restrictions that apply after the franchise agreement terminates or expires. Specifically, for a period of two years, the franchisee (including its principals, owners, guarantors, and their immediate family members) is restricted from involvement with any business that competes with Spray Net by offering or granting licenses or franchises, or establishing joint ventures for a Competing Business. This restriction applies in any location where Spray Net has offered or sold franchises as of the termination or expiration date.
Additionally, for two years post-termination, the franchisee is prohibited from owning, maintaining, or being employed by any other Competing Business within their Designated Territory, within a 50-mile radius of their Designated Territory, within a 50-mile radius of any Spray-Net franchised business, or within a 50-mile radius of any other designated territory granted by Spray Net.
However, the FDD excerpt does not explicitly state whether a franchisee is prohibited from soliciting employees of other Spray Net franchisees after the agreement expires or is terminated. Therefore, it is recommended that a prospective franchisee seek clarification from Spray Net regarding this specific issue to fully understand the post-termination obligations and restrictions related to employee solicitation.