After the Spray Net Franchise Agreement expires, is terminated, or is not renewed, can a franchisee's immediate family member own a Competing Business within the 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 a period of two years after the expiration, nonrenewal, transfer, or termination of the Franchise Agreement, immediate family members of the franchisee, its principals, owners, or guarantors are restricted from involvement with any business that competes with Spray Net. This restriction applies regardless of the cause of termination.
Specifically, these individuals are prohibited from owning, maintaining, engaging in, or being employed by a Competing Business as an officer, director, or principal. They also cannot 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 extends not only within the Designated Territory but also within a 50-mile radius of the Designated Territory, any Spray-Net franchised business that is open and operating, or any other designated territory granted by Spray Net.
This non-compete clause is in place to protect Spray Net's market and franchise system by preventing former franchisees and their families from leveraging inside knowledge or relationships to unfairly compete. Prospective franchisees should carefully consider the implications of this restriction, especially if family members have existing businesses or future aspirations in the same or similar industry. It is important to understand the definition of 'Competing Business' as defined in the Franchise Agreement to fully grasp the scope of this restriction.