Does the Spray Net Franchise Agreement include a section on 'Post-Term Obligations'?
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
b.
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
Yes, according to the 2025 Spray Net Franchise Disclosure Document, the agreement includes post-term obligations. Specifically, after the agreement expires, is not renewed, is transferred, or is terminated, the franchisee is subject to certain restrictions for a period of two years.
These restrictions prevent the franchisee, their principals, owners, guarantors, or immediate family members from engaging in any business that competes with Spray Net. This includes offering or granting licenses or franchises, or establishing joint ventures for a competing business. The geographic scope of this covenant extends to any location where Spray Net can demonstrate it has offered or sold franchises as of the termination or expiration date.
Additionally, for two years post-termination, franchisees are restricted from owning, maintaining, or being involved with any competing business within their Designated Territory, within a 50-mile radius of their Designated Territory, within a 50-mile radius of any operating Spray-Net franchised business, or within a 50-mile radius of any other designated territory granted by Spray Net, regardless of whether a franchised business is operating there.