After the Spray Net Franchise Agreement expires, can the franchisee own a competing business within their Designated Territory?
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:
- 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, for two years after the franchise agreement expires, a franchisee is restricted from involvement with any business that competes with Spray Net. This restriction applies to the franchisee, their principals, owners, guarantors, and their immediate family members. Involvement is defined broadly, including owning, maintaining, engaging in, or being employed by a competing business.
Specifically, the franchisee cannot 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 within the Designated Territory. This restriction also extends to a 50-mile radius around the Designated Territory, any Spray-Net franchised business that is open and operating, or any other designated territory granted by Spray Net, regardless of whether a Spray-Net business is operating there.
This non-compete clause prevents former Spray Net franchisees from leveraging their knowledge and experience gained during the franchise term to directly compete with Spray Net. The restrictions are in place to protect Spray Net's market share, customer relationships, and overall brand integrity. Franchisees should carefully consider these limitations before entering into a franchise agreement, as they could impact their future business opportunities after the franchise term ends.