Does Spray Net grant franchisees an exclusive territory?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
You are not granted any options, rights of first refusal, or similar rights to acquire additional franchises.
Territory Rights
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. For so long as you are in compliance with the terms of your Franchise Agreement, we will not establish any other Business utilizing the Proprietary Marks and System from a location within your Designated Territory. We may establish alternate channels of distribution selling similar services and products, including e-commerce, Internet, mail order or catalogs (as disclosed more fully below under the heading "Reservation of Rights").
Under certain circumstances, you may accept customers from outside your Designated Territory as long as these customers do not reside in the Designated Territory of another franchisee (unless that other franchisee consents). You may not: (i) solicit or advertise within the Designated Territory of another franchisee without that franchisee's express consent and/or cooperation; (ii) solicit or advertise on the Internet without our consent; or (iii) service any customer that resides within the protected territory of another Spray-Net business, unless you obtain the prior consent of the owner of that business.
We reserve the right to develop additional product and service offerings ("Ancillary Services") that we may make available for you to offer through your Franchised Business. We reserve the right to offer such Ancillary Services within your Designated Territory ourselves, through an affiliate of ours, or through another franchisee. You may, subject to your eligibility, purchase the rights to offer Ancillary Services within your Designated Territory(ies). However, nothing in the Franchise Agreement grants you any exclusivity or a right of first refusal related to Ancillary Services in your Designated Territory(ies).
Minimum Performance
Our System has established minimum Gross Sales levels that, if not met by you, will constitute grounds for us to require you to (a) attend additional training, (b) provide an accounting of all local advertising and other marketing spends, including all required amounts paid to Approved Suppliers, and/or (c) revoke your approval to provide any previously-authorized Ancillary Services.
Your applicable minimum Gross Sales for a given year of operations will depend on how long you have been in operation and the number of Designated Territories you have purchased:
| Period(s) | 1 Designated | 2 Designated | 3 Designated | |---|---|---|---| | | Territory | Territories | Territories | | First Year of Operation | $300 ,000 | $350,000 | $375 ,000 | | Second Year of Operation | $431 ,250 | $475 ,000 | $575 ,000 | | Third Year of Operation | $506 ,250 | $600 ,000 | $725 ,000 | | Fourth Year of Operation | $531 ,563 | $700 ,000 | $800 ,000 | | Fifth Year of Operation | $558 ,141 | $735 ,000 | $860 ,000 | | Sixth Year of Operation | $586,048 | $771,750 | $924,500 | | Seventh Year of Operation | $615,350 | $810,338 | $993,838 | | Eighth Year of Operation | $646,118 | $850,854 | $1,068,375 | | Ninth Year of Operation | $678,423 | $893,397 | $1,148,503 | | Tenth Year of Operation | $712,345 | $938,067 | $1,234,641 | The failure of your Franchised Business fails to generate Gross Sales that amounts to at least 70% of the applicable minimum Gross Salesfor a given period of operations detailed in the Chart above will be grounds
for us to (a) terminate your Franchise Agreement or (b) otherwise reduce the number and/or size of your Designated Territory(ies) awarded under the governing Franchise Agreement.
If we elect to reduce the size of your Designated Territory(ies) as an alternative to terminating your Franchise Agreement, we will provide you an Addendum that details the size and boundaries of your reduced territory. You must execute this addendum within ten (10) calendar days of your receipt thereof, or your Franchise Agreement will be terminated. Once your Designated Territory is effectively reduced, we may own or operate, or license another to operate, additional Businesses anywhere outside your revised Designated Territory. If we reduce the size of your Designated Territory under the terms of Item 12, you do not have the right to nor will you receive compensation for any value of the forfeited portion of your Designated Territory. If the zip codes used to define your territory should be changed in the future by the U.S. Post Office or other government agency, we may require you to execute an addendum to your franchise agreement to redefine the physical territory using new zip code numbers. Redefinition of your territory to comply with the U.S. Post Office or other government agency's definition does not constitute a material change to the franchise agreement.
Except as stated above, we may not modify your Designated Territory for any reason other than by mutual agreement.
Reservation of Rights
Your rights under the Franchise Agreement do not include: (i) any right to offer any Spray-Net product or service via e-commerce; (ii) any right to establish an independent website or to establish a URL incorporating the Proprietary Marks or any variation thereof; (iii) any right to sell Spray-Net merchandise via wholesale; (iv) any right to otherwise distribute, market, or implement our products and services in any channel of distribution not specifically identified in this Agreement; (v) the right to sub-license the Franchised Business in any fashion;
Source: Item 12 — TERRITORY (FDD pages 49–52)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, franchisees do not receive an exclusive territory. While franchisees are granted a 'Designated Territory,' they may face competition from other franchisees, company-owned outlets, or other distribution channels controlled by Spray Net. However, as long as the franchisee complies with the Franchise Agreement, Spray Net will not establish another business utilizing its Proprietary Marks and System within the franchisee's Designated Territory. Spray Net also retains the right to establish alternate distribution channels, such as e-commerce or mail order, that may sell similar services and products.
Spray Net and its affiliates retain the right to operate franchised businesses outside the franchisee's Designated Territory and to operate businesses under different marks, even within the Designated Territory, as long as those businesses do not primarily offer painting products and services. Spray Net also reserves the right to use its Proprietary Marks and System in alternative distribution channels without providing compensation to the franchisee for orders solicited or accepted within their Designated Territory through these channels.
Under certain conditions, franchisees can accept customers from outside their Designated Territory, provided those customers do not reside within another franchisee's Designated Territory without consent. Franchisees are restricted from soliciting or advertising within another franchisee's Designated Territory without express consent, soliciting or advertising on the Internet without Spray Net's consent, or servicing customers within another franchisee's protected territory without permission. Spray Net may also introduce additional product and service offerings ('Ancillary Services') that franchisees can offer, but Spray Net reserves the right to offer these services themselves, through affiliates, or other franchisees, without granting exclusivity or first refusal rights to the franchisee in their Designated Territory.
Spray Net may reduce the size of a franchisee's Designated Territory if the Franchised Business fails to meet minimum Gross Sales targets. The minimum Gross Sales depend on the number of Designated Territories and years in operation. For example, the minimum gross sales for the first year of operation for one designated territory is $300,000. If Spray Net reduces the territory size, the franchisee will not receive compensation for the forfeited portion. Except in cases of failure to meet minimum sales or by mutual agreement, Spray Net cannot modify the Designated Territory.