Does Spray Net consider harm from a breach of the non-competition agreement irreparable?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
The franchisee cannot consent to us obtaining injunctive relief. We may seek injunctive relief. See Minnesota Rule 2860.4400(I) also, a court will determine if a bond is required.
In consideration of the grant by Franchisor to the Franchisee as herein provided, each of you hereby agree, in consideration of benefits received and to be received by each of you, jointly and severally, and for yourselves, your heirs, legal representatives and assigns, to be firmly bound by all of the terms, provisions and conditions of the foregoing SPRAY-NET Franchise Agreement, and any other agreement between Franchisee and Franchisor and/or its affiliates, and do hereby unconditionally guarantee the full and timely performance by Franchisee of each and every obligation of Franchisee under the aforesaid Franchise Agreement or other agreement between Franchisor and Franchisee, including, without limitation: (i) any indebtedness of Franchisee arising under or by virtue of the aforesaid Franchise Agreement; (ii) the prohibition of any change in the percentage of Franchisee owned, directly or indirectly, by any person, without first obtaining the written consent of Franchisor prior to said proposed transfer as set forth in the Franchise Agreement; (iii) those obligations related to confidentiality, non-disclosure and indemnification; and (iv) the in-term and post-term covenants against competition, as well as all other restrictive covenants set forth in the Franchise Agreement.
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
Based on the 2025 Spray Net Franchise Disclosure Document, the franchisor's stance on irreparable harm resulting from breaches of non-competition agreements varies by state. In Minnesota, the franchisee cannot consent to Spray Net obtaining injunctive relief, although Spray Net may seek it. A court will determine if a bond is required. This suggests that while Spray Net can pursue injunctive relief for non-compete breaches in Minnesota, it is not automatically assumed that such breaches cause irreparable harm. The court will decide on the necessity of a bond, indicating a case-by-case evaluation of potential damages.
In general, Spray Net emphasizes the importance of non-competition agreements, as seen in the guarantor agreement where the guarantor is bound by the franchisee's obligations, including in-term and post-term covenants against competition. This highlights the franchisor's concern about protecting its market and proprietary information.
However, the FDD includes addenda for specific states like Minnesota, North Dakota, and New York, which modify the standard franchise agreement to comply with local laws. These addenda suggest that Spray Net's ability to enforce certain provisions, including those related to non-competition, may be limited or subject to specific requirements depending on the jurisdiction. Prospective franchisees should carefully review the addendum applicable to their state and consult with legal counsel to understand the enforceability of non-competition clauses in their specific context.