After the Spray Net Franchise Agreement expires, can the franchisee lease/sublease space to a competing business within the Designated Territory?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
B. After the Term of this Agreement.
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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, for a period of two years after the franchise agreement expires, the franchisee is restricted from certain activities related to competing businesses. This restriction applies to the franchisee, their principals, owners, guarantors, and their immediate family members.
Specifically, the franchisee cannot own, maintain, engage in, be employed as an officer, director, or principal of, lend money to, extend credit to, or lease/sublease space to any other competing business within the Designated Territory. This restriction also extends to a 50-mile radius of the Designated Territory, a 50-mile radius of any Spray-Net franchised business that is open and operating, and a 50-mile radius of any other designated territory granted by Spray Net.
This non-compete clause prevents a former Spray Net franchisee from directly supporting or enabling a competing business within a defined geographic area, which protects Spray Net's market share and franchise network. Prospective franchisees should carefully consider these limitations, as they could impact their future business opportunities after leaving the Spray Net system.