What damages are being sought by the former franchisee in the arbitration proceeding against Spray Net?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
9202137 Canada Inc. and its principal Patricia Joyce v. Spray-Net Canada, Inc. and Carmelo Marsala (collectively, "SN Canada"), Arbitration Proceeding. In or around February 2019, a former franchisee of SN Canada commenced this proceeding alleging that the Franchise Disclosure Document disclosed by SN Canada was materially deficient seeking rescission and corresponding damages. SN Canada has filed its response to the former franchisee's notice of arbitration, and the parties are currently waiting for an arbitrator to be assigned. SN Canada intends to continue vigorously defending against this proceeding on the grounds that the former franchisee's claims are without merit.
Source: Item 3 — LITIGATION (FDD page 13)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, a former franchisee of Spray-Net Canada commenced an arbitration proceeding in February 2019. The franchisee alleges that the Franchise Disclosure Document provided by Spray Net Canada was materially deficient.
The former franchisee is seeking two primary remedies: rescission and corresponding damages. Rescission is a legal remedy that essentially cancels the franchise agreement, returning both parties to their pre-agreement positions.
In this context, the "corresponding damages" would likely include recovery of the franchisee's initial investment, franchise fees, and any other losses incurred as a direct result of entering into the franchise agreement based on the allegedly deficient disclosure document. The outcome of this proceeding is uncertain, and Spray Net intends to vigorously defend against the claims.