For a Spray Net franchise, what is the franchisee required to maintain at all times during the term of the agreement?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
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- During the Term of the Franchise Agreement and this Guaranty. During the term of the Franchise Agreement and this Personal Guaranty, each of the undersigned may not, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, partnership or corporation:
- 1.1. Own, maintain, engage in, be employed or serve as an officer, director, or principal of, lend money, lease space or extend credit to (or otherwise have any interest in or involvement with), any other business that offers, provides, manufactures, distributes, or sells any kind of products and services in connection with any business that: (i) offers, provides or sells products or services in connection with (a) the painting (spray-painting or traditional), and/or coating of exterior covering of doors, windows,roofs, and sidings of immovable structures including homes and other buildings, and (b) any kind of the Approved Products, Approved Services, and the Ancillary Services (as these terms are defined in the Franchise Agreement and as may be modified by Franchisor from time to time) that are offered or provided by the Franchised Business and/or other Businesses (each, a "Competing Business"); and/or (ii) offers or grants licenses or franchises, or establishesjoint ventures, for the ownership or operation of a Competing Business; provided, however, that this Sectiondoes not apply to your operation of an SPRAY-NET franchise under a valid franchise agreement withFranchisor, or your ownership of less than two percent (2%) of the interests in a publicly traded company;
- 1.2. Subject to and as permitted by applicable law, employ or seek to employ any person who is at that time employed by Franchisor, Franchisor's affiliates or any other System franchisee, or otherwise directly or indirectly induce or seek to induce such person to leave his or her employment thereat; or Divert or attempt to divert business or customers of any Franchisee-owned Franchised Businesses to any competitor, by direct or indirect inducement or otherwise, or do or perform, directly or
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, franchisees are restricted from engaging in any competing businesses during the term of the Franchise Agreement and Personal Guaranty. Specifically, franchisees cannot own, maintain, or be involved with any business that offers similar products or services related to painting, coating of exterior structures, or any of the Approved Products, Approved Services, and Ancillary Services offered by Spray Net. This restriction also extends to businesses that offer or grant licenses or franchises for Competing Businesses.
However, there are exceptions to this rule. Franchisees are allowed to operate another Spray Net franchise under a valid agreement. Additionally, they can own less than two percent (2%) of the interests in a publicly traded company without violating this clause. This non-compete provision ensures that franchisees remain dedicated to the Spray Net system and do not divert resources or knowledge to competing ventures.
Furthermore, franchisees are prohibited from employing or soliciting employees from Spray Net, its affiliates, or other franchisees within the Spray Net system. They also cannot divert business or customers from other Spray Net franchises to competitors. Any action that could harm the goodwill associated with Spray Net's Proprietary Marks or the System is also forbidden. These measures are in place to protect the integrity and stability of the Spray Net franchise network.