What are the general conditions for Spray Net's approval of a proposed sale or transfer?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall obtain from the third party and provide Franchisor a statement in writing, signed by the third party and Franchisee, of the terms of the offer ("Letter of Intent").
If Franchisor elects not to accept the offer within a thirty (30) day period, Franchisee shall have a period not to exceed sixty (60) days to complete the transfer described in the Letter of Intent subject to the conditions for approval set forth in Section 13(E) of this Agreement.
Franchisee shall effect no other sale or transfer as contemplated under the Letter of Intent without first complying with this Section.
Any material change in the terms of the offer will be deemed a new proposal subject to Franchisor's right of first refusal.
So long as Franchisee has obtained Franchisor's prior written consent, which shall not be unreasonably withheld, a transfer to an existing partner or shareholder, or a transfer as a result of the death, disability or incapacitation of a shareholder or partner, in accordance with the provisions set forth below, is not subject to Franchisor's first right of refusal.
E. Conditions for Approval. Franchisor may condition Franchisor's approval of any proposed sale or transfer of the Franchised Business or of Franchisee's interest in this Agreement or any other acts of transfer described in Section 13(C) upon satisfaction of the following occurrences:
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All of Franchisee's accrued monetary obligations to Franchisor, Franchisor's affiliates, and Franchisor's designated/approved suppliers and vendors, are satisfied;
Franchisee must cure all existing defaults under this Agreement, or any other agreement between Franchisee and Franchisor, Franchisor's affiliates, Franchisor's designated/approved suppliers and vendors, within the period permitted for cure and have substantially complied with such agreements during their respective terms;
Franchisee and Franchisee's principals (if Franchisee is a partnership, corporation
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, the franchisor's approval of any proposed sale or transfer of the franchised business is contingent upon several conditions. These conditions include satisfying all accrued monetary obligations to Spray Net, its affiliates, and its designated suppliers and vendors. Additionally, the franchisee must address and resolve any existing defaults under the Franchise Agreement or any other agreements with Spray Net, its affiliates, or its approved suppliers and vendors within the specified cure period. The franchisee and its principals, if the franchisee is a partnership or corporation, must also meet certain criteria for the transfer to be approved.
Spray Net also requires the franchisee to obtain a written statement, or Letter of Intent, signed by both the franchisee and the third party, outlining the terms of the offer. Spray Net then has 30 days to either accept or reject the offer. If Spray Net declines the offer, the franchisee has a 60-day window to complete the transfer as described in the Letter of Intent, provided they meet all other approval conditions. Any significant changes to the terms of the offer are treated as a new proposal, subject to Spray Net's right of first refusal.
However, a transfer to an existing partner or shareholder, or a transfer due to death, disability, or incapacitation of a shareholder or partner, is not subject to Spray Net's right of first refusal, provided that the franchisee has obtained Spray Net's prior written consent, which will not be unreasonably withheld. These conditions ensure that Spray Net maintains control over who operates a franchise under its brand and that any new franchisee meets its standards and obligations.