factual

Can Spray Net exclude the franchisee from the site if the franchisee defaults under the lease?

Spray_Net Franchise · 2025 FDD

Answer from 2025 FDD Document

f the Lease without such written consent is null and void.

    1. Exercise of Remedies: In any case of default by the Franchisee under the terms of the Lease or under the Franchise Agreement, Franchisor shall be entitled to exercise any one or more of the following remedies in its sole discretion:
  • a) to take possession of the Site, or any part thereof, personally, or by its agents or attorneys;
  • b) to, in its discretion, without notice and with or without process of law, enter upon and take and maintain possession of all or any part of the Site, together with all furniture, fixtures, inventory, books, records, papers and accounts of the Franchisee;
    • c) to exclude the Franchisee, its agents or employees from the Site;
  • d) as attorney-in-fact for the Franchisee, or in its own name, and under the powers herein granted, to hold, operate, manage and control the Franchised Business and conduct the business, if any, thereof, either personally or by its agents, with full power to use such measures, legally rectifiable, as in its discretion may be deemed proper or necessary to cure such default, including actions of forcible entry or detainer and actions in distress of rent, hereby granting full power and authority to the Franchisor to exercise each and every of the rights, privileges and powers herein granted at any and all times hereafter;
  • e) to cancel or terminate any unauthorized agreements or subleases entered into by the Franchisee, for any cause or ground which would entitle the Franchisor to cancel the same;
  • f) to disaffirm any unauthorized agreement, sublease or subordinated lien, to make all necessary or proper repairs, decorating, renewals, replacements, alterations, additions, betterments and improvements to the Site or the Site that may seem judicious, in the sole discretion of the Franchisor; and
  • g) to insure and reinsure the same for all risks incidental to the Franchisor's possession, operation and management thereof; and/or
  • h) notwithstanding any provision of the Franchise Agreement to the contrary, to declare all of the Franchisee's rights but not obligations under the Franchise Agreement to be immediately terminated as of the date of Franchisee defaults under the Lease and fails to cure said default within the applicable cure period (if any).

Source: Item 23 — RECEIPTS (FDD pages 75–219)

What This Means (2025 FDD)

According to Spray Net's 2025 Franchise Disclosure Document, if a franchisee defaults under the lease agreement, Spray Net has the right to exclude the franchisee, its agents, or employees from the site. This is part of Spray Net's broader rights as outlined in the franchise agreement, allowing them to manage and control the franchised business in the event of a default. This provision is designed to protect Spray Net's interests and ensure the continued operation of the business.

Spray Net, acting as the attorney-in-fact for the franchisee, can take various actions to rectify the default. These actions include operating and managing the business, taking actions of forcible entry or detainer, and actions in distress of rent. Spray Net also has the power to cancel or terminate any unauthorized agreements or subleases entered into by the franchisee. This comprehensive control enables Spray Net to address the default effectively and maintain the integrity of the franchise.

Furthermore, Spray Net can make necessary repairs, alterations, and improvements to the site and insure it for all risks associated with their possession and management. Importantly, Spray Net is not obligated to assume the lease or take possession of the site. However, if Spray Net chooses to exercise these rights, they must provide written notice to the franchisee.

Finally, Spray Net can declare all of the franchisee's rights under the Franchise Agreement to be immediately terminated if the franchisee defaults under the lease and fails to cure the default within the applicable cure period. This clause underscores the seriousness of lease defaults and the potential consequences for the franchisee, giving Spray Net significant control over the franchise location in such situations.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.