After the Spray Net Franchise Agreement expires, can the franchisee have any interest in a competing business within the Designated Territory?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
2.2 For a period of two (2) years after the expiration and nonrenewal, transfer or termination of the Franchise 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:
2.2.1 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 or Additional Territory;
(ii) within a fifty (50) mile radius of the Designated Territory or Additional Territory;
(iii) within a fifty (50) mile radius of any Franchised Business that is open or under development as of the date the Franchise Agreement expires and/or is terminated; or
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, for a period of two years after the expiration, nonrenewal, transfer, or termination of the Franchise Agreement, the franchisee, their principals, owners, guarantors, or any member of their immediate family, cannot have any interest in or involvement with any other competing business within the Designated Territory. This restriction also applies within a fifty (50) mile radius of the Designated Territory.
This non-compete clause extends to owning, maintaining, engaging in, or being employed as an officer, director, or principal of a competing business. It also includes lending money to, extending credit to, or leasing/subleasing space to a competing business. The restrictions apply regardless of the cause of termination.
Furthermore, the franchisee is also restricted from involvement with a competing business within a fifty (50) mile radius of any Spray-Net franchised business that is open and operating as of the date the Agreement expires or is terminated. This also applies to any other designated territory that has been granted by Spray Net or its affiliates in connection with a Spray-Net franchised business as of the date the Agreement expires or is terminated, regardless of whether a Franchised Business is open and operating in that designated territory.
This provision is fairly standard in franchising to protect the brand and prevent franchisees from using the knowledge and experience gained while operating a Spray Net franchise to directly compete against the system after leaving. Prospective franchisees should carefully consider these restrictions and how they might impact their future business opportunities.