Can a former Spray Net franchisee represent any connection to the Spray Net system after termination for cause?
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
that is open and operating as of the date this Agreement expires and/or is terminated; or
iv. within a fifty (50) mile radius of any other designated territory that has been granted by Franchisor or its affiliates in connection with a Spray-Net franchised business as of the date this Agreement expires and/or is terminated, regardless of whether a Franchised Business is open and operating in that designated territory; or
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, a former franchisee is restricted from representing any connection to the Spray-Net system after the termination of the franchise agreement, regardless of the cause of termination. Specifically, for two years after termination, the franchisee (including their principals, owners, guarantors, and immediate family members) cannot be involved 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 to any location where Spray Net has offered or sold franchises as of the termination date.
This means that a franchisee who has had their agreement terminated, even for cause, is still bound by certain restrictions. They cannot leverage their past association with Spray Net to unfairly compete with the brand. This non-compete clause is designed to protect Spray Net's market position and franchise system by preventing former franchisees from using the brand's reputation or business model to their advantage in a competing venture.
Furthermore, the restrictions extend to owning, maintaining, or being involved with any other Competing Business within the Designated Territory, within a 50-mile radius of the Designated Territory, within a 50-mile radius of any Spray-Net franchised business, or within a 50-mile radius of any other designated territory that has been granted by Spray Net. These limitations are in place to prevent a former franchisee from capitalizing on the knowledge and experience gained while operating a Spray Net franchise to the detriment of the Spray Net system.
These post-termination restrictions are common in franchising to protect the brand and prevent unfair competition. Prospective Spray Net franchisees should carefully consider these limitations and how they might impact their future business opportunities should they decide to leave the Spray Net system.