After the Spray Net Franchise Agreement expires, is terminated, or is not renewed, for how long is the franchisee restricted from being involved with a business that competes with Spray Net by offering or granting licenses or franchises?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
B. After the Term of this Agreement.
-
- 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.
-
- 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 franchisee faces certain restrictions after the franchise agreement concludes. Specifically, for two years following the expiration, nonrenewal, transfer, or termination of the agreement, the franchisee, along with their principals, owners, guarantors, and immediate family members, is prohibited from being involved with any business that competes with Spray Net by offering or granting licenses or franchises, or establishing joint ventures for the ownership or operation of a competing business.
This restriction applies regardless of the cause of termination. The geographic scope of this covenant extends to any location where Spray Net can demonstrate it has offered or sold franchises as of the date the agreement is terminated or expires.
In addition to the restriction on offering franchises, the franchisee is also barred for two years from owning, maintaining, engaging in, or being employed by 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 granted by Spray Net. This includes being an officer, director, or principal of, lending money to, extending credit to, or leasing space to a competing business. This broad restriction aims to protect Spray Net's market and franchise system from former franchisees using their knowledge and resources to compete against them shortly after leaving the system.