What are the exceptions to the lease default termination clause for a Spray Net franchise?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
SPRAY-NET INC. MINNESOTA ADDENDUM TO THE FRANCHISE AGREEMENT
Section 15 of the Franchise Agreement is hereby modified to add the following language:
The conditions under which this Agreement can be terminated or not renewed may be affected by Minnesota law, which provides Franchisee with certain termination and nonrenewal rights. Minnesota State Section 80C.14 Subd. 3-5, which require, except in certain specified cases, that Franchisee be given 90 days' notice of termination (with 60 days to cure) and 180 days' notice for non-renewal of the Franchise Agreement.
SPRAY-NET INC. MARYLAND ADDENDUM TO THE FRANCHISE AGREEMENT
The Franchise Agreement provides for termination upon bankruptcy of the franchisee. This provision may not be enforceable under federal bankruptcy law.
SPRAY-NET INC. VIRGINIA ADDENDUM TO THE DISCLOSURE DOCUMENT AND THE FRANCHISE AGREEMENT
- Additional Disclosure: The following statements are added to Item 17.h.
Pursuant to Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a franchisor to cancel a franchise without reasonable cause. If any ground for default or termination stated in the franchise agreement does not constitute "reasonable cause," as that term may be defined in the Virginia Retail Franchising Act or the laws of Virginia, that provision may not be enforceable.
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
Based on the 2025 Spray Net Franchise Disclosure Document, the conditions under which the Franchise Agreement can be terminated may be affected by Minnesota law. Minnesota State Section 80C.14 Subd. 3-5 requires that, except in certain specified cases, a franchisee must be given 90 days' notice of termination, with 60 days to cure, and 180 days' notice for non-renewal of the Franchise Agreement. This addendum modifies the original agreement to comply with Minnesota law, providing franchisees in Minnesota with additional rights regarding termination and non-renewal.
Additionally, the Maryland Addendum to the Franchise Agreement states that the Franchise Agreement provides for termination upon bankruptcy of the franchisee; however, this provision may not be enforceable under federal bankruptcy law. This clarifies that federal bankruptcy law may supersede the standard termination clause related to franchisee bankruptcy within the agreement.
In Virginia, the Franchise Disclosure Document and Franchise Agreement for Spray-Net, Inc. are amended to comply with Section 13.1-564 of the Virginia Retail Franchising Act. It is unlawful for a franchisor to cancel a franchise without reasonable cause. If any ground for default or termination stated in the franchise agreement does not constitute "reasonable cause," as that term may be defined in the Virginia Retail Franchising Act or the laws of Virginia, that provision may not be enforceable.