Is a general release required from the franchisee and their principals as a condition for Spray Net's approval of a transfer?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary | |
|---|---|---|---|
| names (if permitted) used in connection with the Franchised Business (as well as all related listings) to us or our designee. | |||
| j. | Assignment of contract by Franchisor | Section 13(G) | No restriction on our right to assign. |
| k. | "Transfer" by | Section 13(A) | Includes any transfer of Franchise Agreement, assets of the |
| Franchisor – | and Section | Franchised Business, or ownership change in you (as the | |
| defined | 13(C) | Franchisee). | |
| l. | Franchisor's approval of transfer by Franchisee | Section 13(A) | We must approve all transfers, but we will not unreasonably withhold our approval if you meet our conditions. |
| m. | Conditions for Franchisor's approval of transfer | Section 13(E) | We have the right to impose the following conditions on any transfer by you: (i) all of your accrued monetary obligations under the Franchise Agreement have been satisfied; (ii) you cure all existing defaults under the Franchise Agreement; (iii) you and your principals must execute a general release; (iv) you or the transferee provides us with a copy of the executed purchase agreement; (v) the transferee must meet our then-current qualifications and criteria for a new franchisee; (vi) the transferee executes our then-current franchise agreement; (vii) you or the transferee pays us a transfer fee of $10,000; (viii) the transferee satisfactorily completes our Initial Training Program; (ix) you must comply with all post-termination provisions of the Franchise Agreement; (x) the transferee must obtain all permits and licenses required for the continued operation of the Franchised Business; (xi) all applicable lessors consent to the proposed transfer; (xii) if applicable, you reimburse us for any |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–62)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, a general release is required from the franchisee and their principals as a condition for the franchisor's approval of a transfer. Specifically, the FDD outlines several conditions that Spray Net has the right to impose on any transfer by a franchisee.
One of these conditions explicitly states that the franchisee and their principals must execute a general release. This means that as part of the transfer process, the franchisee and their principals will be required to sign a document releasing Spray Net from any potential claims or liabilities.
In addition to the general release, other conditions for transfer include satisfying all accrued monetary obligations, curing existing defaults, providing a copy of the executed purchase agreement, ensuring the transferee meets Spray Net's qualifications, and paying a transfer fee of $10,000. The transferee must also execute the current franchise agreement and complete the initial training program.